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Electric Transit Buses Coming to North America

electric Bus.png

On June first, New Flyer Industries (OTC:NFYEF) unveiled its first all-electric bus prototype.

New Flyer is far from the first manufacturer to launch an electric bus.

The first deployment of electric buses on a commercial route was at the end of 2010 in Seoul, using buses developed by Hyundai and Hankuk Fiber. Wikipedia lists twenty manufacturers of electric buses worldwide. Even in North America, Balqon Corporation (OTC-BLQN), a maker of heavy-duty electric vehicles, launched their own 14-passenger electric bus a little over a month ago.

Yet so far, no major major manufacturer of heavy duty transit buses in North America has a battery-electric bus in commercial production.

The other major North American manufacturers of heavy duty transit buses are NovaBus, Gillig, and North American Bus Industries (NABI). Orion was a fifth player until earlier this year, when Daimler, its parent, announced Orion would be wound down.

Here is what the other transit bus manufacturers are doing on the all-electric front:

  • New Flyer is developing its bus in partnership with the Manitoba government, Mitsubishi Heavy Industries (OTCPK:MHVYF), and a local utility and college. They plan two years of operational testing before launching a commercial version.
  • In May, Nova Bus announced a partnership with Quebec to develop two electric buses over three years, a full size transit bus as well as a microbus like the one recently launched by Balqon.
  • Gillig and NABI have not yet made any announcements of electric bus development.

Assuming (a rather big assumption) that development proceeds on schedule, New Flyer’s more aggressive timeline should lead it to introduce the first full size, production model all-electric bus built to North American standards. These standards are important because the market for transit buses is very regional. New Flyer itself had a graphic demonstration of just how regional the world bus market is when it failed to find international buyers for a large number of used transit buses last year. It ended up selling them all much closer to home.

Electric Drive and Mass Transit

I believe buses are a much better use for EV technology than cars, because buses are generally used much more intensively. Intensive use allows for quicker recovery of the capital invested in expensive batteries. Transit buses also have predictable routes, meaning that range anxiety is not an issue, and there is potential to charge the bus while it is on route. Genoa and Turin have a system already in place to wirelessly quick-charge electric buses while they stop to pick up passengers. On route charging could also be accomplished with traditional trolley bus overhead wires even while the bus is in motion. Predictable routes and fleet ownership also make transit buses a good fit for battery swapping.

Since transit agencies are often owned by city governments, they may also be able to incorporate some of the non-financial benefits of electric drive in their investment decisions. While an individual Leaf owner will see little benefit from improved city air quality, a city government may see a move to electric buses as a way to meet air quality goals. Similarly, they may see benefits from reduced urban noise pollution, and increased ridership from the smoother ride that results from electric drive and regenerative braking, when compared to traditional buses.

Incidentally, I think New Flyer stock is quite attractive at the current price below $7. I added to my position on Friday, even before I heard of the electric bus announcement.

Disclosure: Long NFYEF

This article was first published on the author's Forbes.com blog, Green Stocks.

Disclaimer: Past performance is not a guarantee or a reliable indicator of future results. This article contains the current opinions of the author and such opinions are subject to change without notice. This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

This article was first published on AltEnergyStocks.com as "Where Electric Vehicles Make Sense."

Source: Where Electric Vehicles Make Sense