US Schools Can Subscribe To An Electric School Bus Fleet At Prices That Beat Diesel

Companies including Highland Electric and Thomas Built have fleet-as-a-service offerings for U.S. school districts that struggle with the high upfront costs of electric school buses and the charging equipment needed to keep them running. Jeff St. John from Canary Media writes: On Thursday, the Massachusetts-based startup and the North Carolina-based school bus manufacturer announced a plan to offer "electric school bus subscriptions through 2025 at prices that put them at cost parity with diesel." This is essentially a nationwide extension of Highland Electric's "turnkey solutions provider" business model, backed by a big bus maker as its partner. Highland provides the buses and charging infrastructure, pays for the electricity to charge them, covers maintenance costs and manages the other complexities of going electric. The school district or transit authority pays an all-inclusive subscription fee, one that's structured to be lower than its current budget for owning, fueling and maintaining its existing diesel fleets. Highland, which has raised $253 million in venture capital funding, has projects in 17 states and two Canadian provinces, including one of the largest single electric school bus deployments in the U.S., in Montgomery County, Maryland, outside Washington, D.C. While most of its projects have started small, CEO Duncan McIntyre sees the Montgomery County project -- now at 25 electric buses and set to expand to 326 over the next four years -- as the model for the future. "We are in the business of helping communities that want to complete a full fleet-electrification effort," McIntyre said in an interview. "They don't have to commit to that upfront -- but there's usually an interest in going beyond a few-vehicles pilot." Other companies are also pulling together private-sector financing to tackle this public-sector market. Nuvve, a publicly traded EV-charging and vehicle-to-grid provider, has formed a financing joint venture that's teamed up with school bus manufacturer Blue Bird Corp. to offer similar electric bus leasing and infrastructure offerings with school districts in California, Colorado, Illinois and other states. And Canadian EV maker Lion Electric has teamed up with Zum, a San Francisco-based startup offering transportation-as-a-service for a number of school districts, in a project aiming at replacing half of Oakland, California's school buses with electric models in the coming year. Such large-scale electric bus projects remain the exception rather than the rule, however. Out of the roughly 500,000 school buses in the U.S., only about 0.2 percent -- just over 1,000 -- were electric as of the end of 2021, according to data from the World Resources Institute's Electric School Bus Initiative. And of the 354 U.S. school districts that have committed to buying electric buses, only 28 plan to deploy 10 or more, according to WRI data. This relatively low rate of adoption is bound to accelerate as the economics of electric school buses grow more attractive, however. A 2020 study (PDF) conducted by Atlas Public Policy for Washington state indicated that falling battery costs and rising manufacturing volumes should bring electric school buses within total-cost-of-ownership (TCO) parity with fossil-fueled buses by 2030. Total cost of ownership -- a metric that bundles long-term fueling, operating, maintenance and insurance costs and a vehicle's residual value into one single figure -- can be brought down with structures that reduce costs or open up revenue-generating opportunities for the fleets in question, Nick Nigro, Atlas Public Policy's founder, said in an interview. The right combination of structures could allow electric buses to come into TCO parity with diesel buses as soon as 2025, he said.

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