Sign Up for FREE Daily Energy News
Canadian Flag CDN NEWS  |  US Flag US NEWS  | TIMELY. FOCUSED. RELEVANT. FREE
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2
BREAKING NEWS:

Hazloc Heaters
Copper Tip Energy Services
Hazloc Heaters
Copper Tip Energy


The Electric Bus Is ‘Close to Inevitable’: Q&A With Proterra’s CEO


These translations are done via Google Translate
Jun 10, 2019 by Brian Eckhouse
(Bloomberg)

There are a few hundred electric buses in the U.S.—and thousands still running on diesel. That gap doesn’t deter Ryan Popple, chief executive officer of Burlingame, California-based electric bus manufacturer Proterra Inc., from proclaiming a zero-emission future for American buses to be a sure bet. A big part of his pitch rests on simple economics.

The energy cost of operating an electric bus is about 20 cents a mile over its lifetime, Popple says, while the cost of running on diesel today is about 75 cents a mile. Many transit agencies continue ordering diesel buses because the upfront cost is lower. To address this, Proterra recently rolled out a battery-leasing model akin to the programs that ignited the rooftop-solar boom in the U.S. There might also be help from Democrats in the U.S. Senate, who are pushing legislation to support e-bus adoption and encourage use in the nation’s school fleet.

Popple, one of the first employees at Tesla Inc. and a former partner at Kleiner Perkins Caufield & Byers LLC, discussed bus procurement, tariffs and markets in an interview at Bloomberg’s New York headquarters. He declined to discuss any plans for an initial public offering. The following has been edited and condensed.

You’re very bullish on the electrification of a U.S. fleet that has very few zero-emission buses today.

I dare say it’s close to inevitable at this point. Some mainstream Middle American cities are going all-electric. The longer you run diesel, the more career risk you’re taking. Because ultimately, someone could come in and say, “Wait, you wasted $40 million of taxpayer money because you thought it was hard to figure out how to transition to EV?”

Why are diesel buses slow to be replaced?

It’s a fleet-replacement challenge. Transit agencies churn or turn over one-twelfth of their fleet each year. So even if cities started going electric now, it means their communities are still going to be breathing diesel for 12 years.

If you apply that framework to school buses, regional trucking and refuse, ideally within 20 years you’ll be able to walk down a city street in New York and there’s no noise pollution and no diesel pollution.

Big cities like New York and San Francisco have trailed unlikely early adopters like Park City, Utah. What explains the places where e-buses catch on?

Most of the early adopters have been smaller, more agile cities. You see San Jose before San Francisco. You see Park City before Salt Lake City. But some large cities have culturally acted like early adopters, including Los Angeles, Seattle and Dallas.

Major cities’ requirements on a product basis are tougher. New York is a great example of that. It probably has the toughest structural testing requirements of any fleet. It’s one of the reasons why, even on the diesel bus side, there are very few qualified vendors that can sell anything to New York. In some ways, selling to New York is like being ready for the Super Bowl.

GLJ
ROO.AI Oil and Gas Field Service Software

Do you lose to diesel buses when pitching transit agencies on electric?

Diesel-bus companies don’t really sell anything. Procurements are on auto-pilot. Years ago, they put in place a contract and built a customer relationship. It’s not that the diesel companies are good at marketing, it’s just everyone assumes that when the procurement comes up, they’re just going to carbon-copy the last version of that contract and hand it to the vendor.

The diesel-bus guy doesn’t come in and give a compelling pitch on why black smoke coming out of the bus is good. Fossil fuel maintains its market-share by people not paying attention. If you knew that New York City was about to buy 500 diesel buses and run them in your neighborhood, you’d go to a meeting and you’d make a public statement: “This is a really dumb idea and I’d prefer that my kids not breathe diesel.” But it tends to happen without anybody paying attention.

Are transit agencies questioning the e-bus technology itself?

There’s no science risk here. There’s just a ton of implementation work. Often, what we’re doing when we sell electric is just helping them understand how to do it, not necessarily why or if. How is charging going to work? How do I coordinate with the utility? Do I charge overnight or on route?

If electric buses are already the smarter economic play, do electric buses need subsidies ?

The market will have an organic growth rate that’s very high with or without policy. When we look at the health and the environmental benefits of basically pulling in the adoption curve by three years or five years, I think the policies pencil out. They have a good return on investment.

What policy can do is take the free-market adoption curve and shift it left or right, and we are so far behind in terms of where we need to be in terms of carbon dioxide that I would argue that policy is warranted because we have failed to get it done waiting for market forces.

How would tariffs on imported Mexican goods affect your company?

A relatively small impact. We’ve set up 70% of our supply chain to be U.S.-dollar based. And we get more from Europe than Mexico. If everything we get from Mexico gets tariffed by 5%, our parts cost would go up less than 1%.

The bigger risk for a company like us is not direct variable cost. A lot of the U.S. automotive supply chain in Mexico has been carefully put in place over the past 20 years or so. So if the high-volume players are hammered by the tariffs, supply chains could change. We definitely draft off the supply chains they set up.



Share This:



More News Articles


GET ENERGYNOW’S DAILY EMAIL FOR FREE