For several governments, phasing out internal combustion engines in favor of electric cars is inevitable as they seek to reduce their carbon footprint. At the end of 2018, there were about 1 million electric vehicles on American roads, and they are projected to reach 18.7 million at the end of 2030. While privately owned EVs have reigned supreme on the road, the electric bus sector has been slowly but surely increasing its market share. In October last year, U.S. electric bus manufacturer Proterra snagged its 100th customer, a testament to just how much the industry had achieved and could achieve in the future.
Positive feedback from early customers is partly responsible for the increased uptake of electric buses, posits Proterra Chief Commercial Officer Matt Horton. No one wants to be the one to try out a new product, especially if it is replacing something they have known and trusted for decades. When the electric buses first came out, most transit agencies weren’t sure whether they could perform as well as diesel or natural-gas buses, and that the charging cycles didn’t interrupt their duties. However, the first few that jumped onto the bandwagon are back for more.
“One of the clear trends that we’re seeing is that many customers that purchased their first pilot vehicles almost a decade ago have now purchased several rounds of electric vehicles,” says Horton.
New financing strategies have also allowed more transit agencies to purchase electric buses. Although conventional bus purchases usually tap into funding from the Federal Transportation Administration to cover up to 80% of the purchase price, many of the early purchases of electric buses relied on specialized grants for electric vehicles. More transit agencies are now using their traditional forms of financing instead of waiting for a special electric vehicle grant, Horton says. “The industry is now viewing electric vehicles as a mainstream procurement option.” Proterra has also reduced customer costs by selling its electric bus while leasing the battery system for 12 years, and it guarantees battery performance and provides a midlife replacement.
“Every customer is different but generally speaking, customers will experience savings on a monthly basis by using a battery lease.”
Fast, convenient, and efficient charging will also determine how fast the electric bus sector grows. Proterra has equipped its largest variant with a battery that holds up to 660 kilowatt-hours, allowing a single charge to cover an entire day’s activities without any disruptions during peak hours. “Buses are almost always charged overnight when demand on the grid is lowest. It actually helps the utility operator keep a more stable baseload of power that they need to deliver,” says Horton.
In the future, Proterra could equip its chargers with vehicle-to-grid services, enabling transit agencies to sell power from bus batteries by discharging it into the grid when demand is high. “Our customers are generally pretty sophisticated about maintenance and management of their fleet assets,” says Horton. “If it’s an economic benefit to them to use the vehicles to provide grid services, we believe many of them will choose to do that.”
The future of electric vehicles looks increasingly attractive, and it is therefore no wonder that leading players like Nikola Corporation (NASDAQ: NKLA) are ramping up their R&D to meet the EV needs of tomorrow.
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