Bloomberg New Energy Finance (BNEF) has issued a whitepaper discussing the electric buses’ competitiveness with conventional diesel and other conventional energy fueled buses in cities.
The report Electric Buses in Cities was authored by BNEF on behalf of C40 Cities Climate Leadership Group.
According to the report, cities around the globe are increasingly deploying electric buses driven by growing concerns over urban air quality, carbon emissions and operational cost savings.
As the world’s urban population continues to grow, identifying sustainable, cost effective transport options is becoming more critical.
Falling battery prices will make electric buses fully cost competitive on a total cost of ownership (TCO) basis in almost all configurations within 2-3 years.
For instance, the more expensive e-bus configurations, the 350kWh bus using slow depot charging and the 110kWh electric bus coupled with wireless charging, will become TCO competitive with diesel, even with lower annual mileage this year (2018).
In a large city, with electricity prices at $0.10/kWh, for the most expensive 350kWh electric bus, using slow, overnight charging at the depot, diesel prices would need to be around $2.5/gallon ($0.66/liter) for the e-bus to have a competitive total cost of ownership.
The biggest challenge for electric buses is still their high upfront cost compared to equivalent diesel buses.
However, new business models are emerging, involving battery leasing, joint procurement and bus sharing to address the high cost associated with e-buses.
Another barrier to adoption of electric buses is the uncertainty around the residual value of the bus, which in turn is driven by uncertainty around the lifetime of the battery and end-of-life options.
BNEF recommends governments introduce policies that regulate the end-of-life requirements for batteries, and provide clear responsibilities to the different parties involved to address the challenge.
Underdeveloped supply chains were another issue shared by the majority of the cities interviewed for this report. Cities believe the number of electric bus models offered is still very limited, and does not sufficiently cover all of their needs.
Download the report here…