There is a ton of hype around electric cars right now, for understandable reasons. Several snazzy new models have been released recently, range continues improving, and ambitious cities are pledging to get rid of gas and diesel cars altogether. It’s a heady time.
But here’s a little appreciated fact: Personal vehicles are probably the most challenging to electrify cost-effectively. (Dragging one or two passengers around over long distances in a 2-ton vehicle takes a lot of energy.) The case for electrification is actually stronger for other types of vehicles.
At the top of the list: buses! City transit buses are ideal candidates for electrification.
For one thing, the world is rapidly urbanizing and particulate pollution — especially from diesel, the fuel of choice for older buses — is increasingly seen as a health crisis. Old buses drive around the city all day, at low speeds, spewing diesel smoke directly into urbanites’ faces, leading to countless illnesses and early deaths. (Diesel smoke is a big contributor to the 6.5 million deaths a year caused by air pollution.)
Electrification would mean that buses emit virtually no air pollutants or greenhouse gases. (The power plants where their electricity is generated might still generate those pollutants, but even if it is powered by coal plants, an electric bus averages far less pollution per-mile than a diesel bus.) Urban air quality would notably and immediately improve.
As a fuel, electricity is far cheaper than diesel or natural gas, and given that buses are utilized four times as much as the average personal vehicle, those savings add up. And because EVs of all kinds are simpler and have fewer parts, maintenance costs are lower.
Finally, electric buses are also just a much, much nicer experience — lower to the ground, roomier (diesel engines take up lots of space), not choked with the smell of fuel, and quieter, indeed close to silent. It is difficult to quantify the impacts of noise pollution in urban areas, but, well, imagine a dense urban area without big diesel engines roaring to life every few seconds. It would be nice.
All of this has been true for decades, of course. People were talking about battery-electric buses (BEBs) at the turn of the century. What’s changed is that the technology has advanced in leaps and bounds (range and power have doubled in just the past few years), an actual EV industry/supply chain has been established, and charging infrastructure is spreading.
The cost differential is still daunting — a BEB still costs $200,000 to $300,000 more up front — but the cumulative advantages have grown to the point that dozens of cities are rushing to replace their fleets. The latest is New York City, which announced on April 25 it will convert its public bus system to an all-electric fleet by 2040, or sooner.
Let’s take a quick look at some recent developments.
Electric bus sales are growing briskly, but will they boom?
There aren’t many reports available to the public on the global bus market (plenty of paywalled reports, if you’ve got $6,500 burning a hole in your pocket). But we can extract the gist from various summaries and, uh, purloined copies.
Analysts seem to agree that for the next 10 years or so, sales of nondiesel buses will grow much faster than diesel, though by absolute numbers diesel will remain the dominant fuel, because diesel buses are growing from a much larger base.
For instance, Navigant Research recently issued a report looking the global market for medium- and heavy-duty buses and projected this for the next 10 years.
Over the next decade, they see the global bus market expanding from just over 800,000 to over a million. The share taken by diesel will decline from 58 to 51 percent. Hybrids and BEBs, at a compound annual growth rate (CAGR) of 2.9 percent, will go from 21 to 22 percent by 2027. (BEBs are a growing part of that segment, with sales growing 40 percent just over the past year.)
The analysts at Freedonia Group are a little more bullish, projecting hybrids and BEBs to hit 22 percent by 2021. P&S Market Research projects a CAGR of 3.5 percent. All analysts agree that growth of nondiesel buses will be fastest in the developing world, particularly China and India, where air pollution issues are worst.
In short, analysts are being conservative (as analysts are wont to do), projecting steady incremental growth based on current trends. If they’re right, BEBs will grow, but will remain a relatively marginal presence in the global bus fleet for the next decade.
Perhaps not surprisingly, Ryan Popple, the CEO of electric bus company Proterra, thinks those analysts are missing the boat (or, uh, the bus).
In a February 2017 podcast interview with The Energy Gang, Popple predicted that, in the US alone, BEBs will represent a third of all new transit sales by 2020, 50 percent by 2025, and 100 percent by 2030.
In other words, he thinks BEBs will hit an inflection point, growth will radically accelerate, and they will eat the urban transit market whole, in fairly short order.
Why is Popple so confident? It has to do with lifecycle costs.
Costs, broadly considered
A recent paper from researchers at Carnegie Mellon University set out to compare different bus options based on their total lifecycle costs, which means construction, fuel, maintenance, infrastructure, air pollution impacts — everything.
They found that BEBs are currently competitive, on a total lifecycle-cost basis, with liquid natural gas (LNG), compressed natural gas (CNG), and hybrid diesel buses. That means BEBs can plausibly compete with roughly 40 percent of the current bus market, without any subsidies.
But here’s the twist. It is typical, in the US, for local transit agencies to get a big chunk of their transit capital funding from the federal government (specifically, the Federal Transit Administration). So the researchers modeled what would happen from a city’s perspective if 80 percent of the upfront capital costs of their bus purchases were covered.
Here’s what they found — note that there are two columns for each type of bus, the left with 80 percent of capital covered, the right without.
Because capital costs are the biggest chunk of BEB lifecycle costs — remember, they cost $200,000 to $300,000 more than diesel buses up front — outside capital helps them the most. In fact, for cities with federal funding, it makes BEBs the lowest cost option. (Note that this would be true even without considering air pollution or climate benefits.)
This point is important and worth dwelling on a moment. It is a perpetual problem for clean energy technology that it costs more up front but saves more money over the long haul; purchasing decisions tend to be made by myopic agents biased against upfront costs. Most clean energy markets require tweaks and incentives to overcome this misalignment of incentives.
Municipal transit decisions in the US have a built-in counter-balance to that problem. Municipal officials, because they do not have to raise the full upfront capital, are freed to consider lifecycle costs. This makes municipal transit a huge potential market for EBs.
There’s still a great deal of bias toward the status quo, of course — any new technology has to overcome it. Cities know how to plan for and deal with liquid-fueled fleets. The needs of electric fleets are somewhat murky.
Luckily, the barriers to BEB adoption — the high upfront costs, the limited range, the unfamiliarity of charging infrastructure — are being rapidly overcome. Let’s take a brief look at how the market and technologies are evolving (faster than anyone predicted). As you’ll see, a snapshot of today’s costs scarcely does justice to the potential.
As BEB tech advances, the market grows and big players jostle for advantage
The bulk of the buzz in the BEB space is around California-based Proterra. It was founded way back in 2008, but in 2014, the midst of a slump, it hired CEO Ryan Popple away from Tesla to turn the company around and make it more, uh, Tesla-ish.
And that’s just what he’s done. Popple pulled some top talent from Tesla and, crucially, adopted Tesla’s strategy of focusing exclusively on EVs, designing them from the ground up rather than retrofitting existing vehicle designs. That has meant some bold choices, but it seems to be paying off — the company is growing, drawing new funding, and riding a huge wave of hype, straining to keep up with demand (like, uh, Tesla).
To date, Proterra has sold 400 BEBs to a variety of cities around the US, but it is rapidly ramping up manufacturing capacity, hoping to crank out 400 BEBs a year going forward.
Because it uses ultra-lightweight carbon fiber for the body rather than steel or aluminum, Proterra’s buses are thousands of pounds lighter than their competitors’. Combined with custom-designed batteries, its newest model is producing jaw-dropping results.
To wit: Last month, Proterra’s brand new, 40-foot Catalyst E2 Max traveled more than 1,000 miles on a single charge. (Yes, you read that right.)
That 1,101.2-mile drive set the new all-time world record for distance traveled by an electric vehicle — a record previously held by an experimental one-seater EV that was, according to the company, 46 times lighter.
The long, flat battery packs in the floor and ceiling hold between 440 and 660 kWh of energy (double the company’s previous bus), translating to a nominal range of between 200 and 350 miles, depending on the configuration. That is, needless to say, longer than most transit routes in America.
The bus boasts two electric motors, which give it 510 horsepower for acceleration (compared to a diesel bus’s 280) and allow it to tackle 26 percent grades, “more than twice the performance of the average 35- or 40-foot diesel bus, and 72 percent better than competing electric transit vehicles.”
In short, relative to diesel buses, Proterra’s new bus is quieter, accelerates faster, copes with hills better, smells better, has comparable range, and boasts radically lower fuel costs. Not bad.
Proterra is also licensing its drivetrain — it will be used by the EU’s Van Hool for its new line of BEBs — and has (like, ahem, Tesla) open-sourced its fast-charging technology, which can fully charge a bus in 10 minutes.
Proterra recently opened a new manufacturing facility outside LA, hoping to ramp production to keep up with demand.
It is far from alone, though, in this growing market. Earlier this month, Chinese automaker BYD, backed by billionaire financier Warren Buffet, unveiled a massive expansion of its manufacturing facility in Lancaster, California, more than quadrupling it to 450,000 square-feet. (It is powered entirely by renewable energy.) The facility will be cranking out not just buses, but electric trucks for various medium- and heavy-duty applications.
Volvo, a leader in the space, recently unveiled a schmancy new version of its 7900 series BEB. It gets 125 miles on a full charge, but, interestingly, Volvo is also offering wireless charging embedded in roads as part of a “total solution” for cities.
Hyundai recently unveiled a BEB (the “Elec City,” get it?) with 180-mile range. Volkswagen, still reeling from its diesel scandal, will invest $1.7 billion in developing electric (and eventually autonomous) trucks and buses. New Flyer, one of the world’s biggest transit companies, recently unveiled its new Xcelsior Charge BEB, with a 200-mile range. Tata Motors is going crazy with BEBs in India. And so on.
As these companies scale up, it creates more and more of an actual industry, a supply chain of parts and expertise that aspiring new companies can draw on. With scale and learning come falling costs.
Right now, BEBs are just barely on the cusp for many cities — a close and agonizing economic decision. But as battery costs continue to fall, economies of scale kick in, and simple urban envy goes to work, the market will expand rapidly, the business case will become clearer, and the trickle of cities will become a flood. It has already begun.
Cities are going gaga for BEBs
In October, representatives from a dozen global cities signed the Fossil-Fuel-Free Streets Declaration, which pledges them to purchasing only zero-emissions buses (i.e., BEBs) starting in 2025. From North America, Vancouver, BC, Los Angeles, and Seattle signed.
Los Angeles has committed to transitioning its entire bus fleet (the nation’s second largest, which previously transitioned from diesel to CNG) to electricity by 2030. It recently ordered 60 new 40-foot BEBs from BYD and 35 new 60-foot, articulated BEBs from New Flyer, with an option to purchase 65 more after testing.
“We have two choices,” said Mayor Eric Garcetti in July. “We can wait for others, and follow, at the expense of residents’ health — or lead and innovate, and reduce emissions as quickly as possible. I’d much rather do the latter.”
King County Transit, which serves Seattle, recently announced a commitment to purchasing 120 BEBs by 2020, starting with 73 from Proterra (“more than 20 percent of Proterra’s entire sales since its inception,” notes Fred Lambert). Eight will go in service this year; 11 more next year.
But LA and Seattle are not alone. New York, which has the largest transit fleet in the country, is testing 10 all-electric buses and plans to purchase 60 more by 2019 and go all-electric by 2040, InsideClimate News reports. Washington, DC now has 14. Chicago has plans to buy 20 to 30 BEBs. Louisville, Kentucky has 15. Twin Cities’ Metro Transit is getting six this year. Park City, Utah, will get seven (in addition to the six it has). Portland, Oregon, will get five. Albuquerque, New Mexico, is ordering 18 60-foot, articulated BEBs from BYD. Up in Canada, Edmonton will buy only BEBs beginning in 2020, while Montreal will poke its toe in the water with three. And so on.
And that’s just North America, where BEBs are currently 1 percent of the fleet. In China, they’re already at 20 percent. If I tried to cover all the Asian and EU cities electrifying their bus fleets, this post would never end.
The future is BEB
The municipal transit market, while extremely large, is also fairly slow-moving. Buying buses is a big decision, transit planning tends to be a plodding process, and federal grants take forever.
Nonetheless, I’m with Popple. Contra Navigant et al, I don’t think this is going to be a matter of steady linear growth for the next 10 years. At some point, likely within the decade, the market will cross a threshold and start rocketing up the bottom of the “S curve” new technologies tend to follow. No analyst wants to predict exactly when that will happen — they’ll look dumb if they guess too early, but won’t look dumb if they’re too late like all the other analysts — but I don’t think it’s very far away.
BEBs are already tiptoeing around at the edge of penciling out for lots of cities. As the industry scales up, costs come down, and the benefits of BEBs become visible to the urban public, more and more cities will board the bandwagon. Eventually, the lifecycle-cost lines will cross decisively and there will be no coherent case for not going all electric.
My prediction: That virtuous cycle begins relatively soon and, as Popple says, by 2030, BEBs will be the default choice for new transit.
In 2030, no city official would dream of ordering a deafeningly loud, literally poisonous people-moving machine that depends on tens of thousands of gallons of imported liquid fossil fuel at fluctuating, unpredictable prices.
I mean ... why would you?