Windsor, Ont., is touting that it will be the first city in Canada to use all-electric buses in its public transit fleet.

The city intends to purchase as many as 10 electric buses from Chinese manufacturer BYD. Transit Windsor plans to add two of those 12-metre electric buses to its fleet by fall. More may be added later.

"We’re excited about being the first and being a leader in putting electric buses in the streets," Windsor Mayor Eddie Francis said. "This will send shock waves through the system."

'This will send shockwaves through the system.'— Windsor Mayor Eddie Francis

Windsor signed the letter of intent in an effort to save money and create jobs in a city that has Canada's highest unemployment rate. There is an exclusivity agreement included in the deal, which states the company will stop looking for a North American municipality in which to manufacture the buses while Transit Windsor runs pilot tests with the buses.

Windsor still needs to build infrastructure, including a charging station, to support the buses powered solely on electricity.

The mayor said the electric buses cost approximately the same as conventional bus but provide the city savings in the long run.

"It's the operational dollars we'll save that we're interested in. Running an electric bus will save a considerable amount of money given oil prices are climbing as high as they are," Francis said.

Francis said one of the goals in negotiating the agreement was to position Windsor to pioneer the efficient use of electric buses within its public transit system and eventually to set up a manufacturing hub.

The mayor said Windsor will help BYD “aggressively market” the buses to other North American cities.

"If the sales take off as we expect them to take off in other jurisdictions, those manufacturing facilities will be here," Francis said.

Currently, the buses are only manufactured in China.

Francis said BYD officials told him they would like manufacture up to 500 buses per year in Windsor.

"That’s 500 direct jobs and that doesn’t include the parts supply chain up stream and downstream," Francis said.

Testing the market

Michael Austin is a vice president with BYD America.

"We wouldn't want to put in a factory that's only going to be sustainable for one or two years. We're going to want to find what that market size is and part of this is really to build creditability in the market place and give us some time to figure out what the market size is," Austin said.

Austin said the fact Transit Windsor runs buses into Detroit through a connecting tunnel gives his company and its buses more exposure to a larger market.

Windsor-Detroit also offers BYD a chance to see how their buses perform in a colder, northern climate.

"The climate is different where these buses have been typically running. We have about 2 million fleet miles established already from the technology in China but it's mostly from Hong Kong, which is a tropical area," Austin said. "We haven't run buses in cold weather. We believe they'll operate with no problem flawlessly but we need to prove that."

Similar deals, circumstances in L.A.

BYD opened its North American headquarters in Los Angeles in October 2011. At the time, Hertz agreed to use smaller electric BYD buses to shuttle passengers around LAX Airport.

However, Bloomberg News reported that BYD's opening in LA came almost year later than expected and with fewer jobs than promised.

BYD originally said it would open the North American office by the end of 2010 and would employ 150 employees by the end of the end of that year, according to Bloomberg.

Instead, the news agency reported it arrived in L.A. in October 2011 with 20 employees, with plans to employ 100 by the end of 2012.

According to the report, jobs were a key selling point for the city. Los Angeles County had an unemployment rate of 12.2 per cent in September 2011, which was well above the U.S. national average of 9.1 per cent at the time.