Take A Seat, Tesla; The Real Revolution In EVs For The Masses Is On The Bus

China’s BYD and California-based startup Proterra are vying for leadership in the fast-growing U.S. market for electric buses, while New Flyer, North America’s dominant maker of transit vehicles, is also eyeing bigger sales of emission-free models.

BYD opened a dramatically enlarged plant in Lancaster, California, this month that’s designed to make 1,500 electric buses, delivery vehicles, forklifts and trash trucks a year, the largest such facility in the U.S. That followed Proterra’s opening of its second bus factory in July, near Los Angeles. Led by Tesla veterans, Proterra also said Monday it will supply its longest-range battery packs to Belgian coach-maker Van Hool, and has upgraded its electric drivetrain to boost horsepower and acceleration.

BYD is a dominant force in China’s electric vehicle market and wants to replicate that success in the U.S. Proterra seeks to stand out as the tech leader, touting cutting-edge battery packs and electric motors to quickly convince transit operators to dump diesel and embrace electrification.

“When we can design and build (components) ourselves we get far better performance at much lower prices, and that’s really going to help us continue down the cost curve and continue up the performance curve,” Matt Horton, Proterra’s chief commercial officer told Forbes. “It’s going to be so clear that electric is better than diesel that the conversation, we think, about diesel fuel will be over in public transit in just a couple years.”

Battery buses have been on the road in small numbers for years, limited by high prices, range and charging infrastructure. Steady improvements in cell and pack design, as well as better software to monitor and manage thermal issues have boosted performance and brought costs down from about $1 million per vehicle a few years ago to about $700,000 today. That’s still much more than a diesel bus, at about $400,000, but electric busmakers argue that lower fuel and maintenance costs more than pay back that upfront premium.

The market for transit buses in the U.S. and Canada is around 6,000 units a year, according to New Flyer, a fraction of the 21 million passenger vehicles sold in the two countries in 2016. Yet electrics will account for a bigger share of the transit market this year, with up to 7% of new buses being battery powered, according to interviews with industry executives, compared with about 1% for passenger vehicles. While bus sales are relatively small, they have a big impact: Personal vehicles typically carry one or two passengers a day; each urban transit buses carry hundreds.

Musk argues that electric vehicles, ideally repowered with solar energy, are a critical tool to reducing carbon. An increasing number of transit agencies agree with him and want petroleum alternatives to minimize emissions. Major U.S. cities including Los Angeles, Seattle and New York are looking to ultimately shift to entirely zero-emission transit, while Philadelphia, Nashville, Chicago and numerous others are adding more electrics to their fleets.

“Absolutely we are seeing the trend of zero or near-zero” buses, New Flyer CEO Paul Soubry told Forbes. “In 2017, the number that will be electric will be somewhere between 300 to 400. Next year will be progressively more.”

The industry will shift is “not going to be dramatic, but will be a progressive evolution and acceptance of electrification,” he said. Unlike BYD and Proterra, which sell only electrics, it supplies transit agencies with the powertrain option customers determine best suit their needs, Soubry said.

New Flyer’s share of transit bus sales was 45% in 2016, and included diesel, natural gas, hybrid and electric models. Still, the company recently invested an additional $25 million into its R&D facility in Anniston, Alabama, where it also makes buses, to study improved ways to electrify its products, as well as autonomous and connected vehicle technology.

Read the full article on Forbes.