New leasing venture aims to bring more electric buses to Canada
Leasing cuts upfront costs dramatically, investors say
Canadian bus operators can now lease electric buses rather than buying them upfront, a choice which investors hope will encourage Canadian cities to adopt battery-powered electric vehicles more quickly.
Canadian transit authorities, such as TransLink and B.C. Transit, have been slow to adopt electric buses which can cost up to $1 million and require new infrastructure and training for drivers.
California investment company Generate Capital believes that by expanding its new leasing program to Canada, it can overcome "inertia in the market," by allowing customers to make the switch from diesel to electric fleets without shelling out millions of dollars upfront.
'Fear of the unknown' slows market
"Fear of the unknown and change in general seems to get people to want to go very slowly and that actually is the worst of all outcomes." said Jigar Shah, the co-founder of Generate Capital.
But Matthew Klippenstein, a Vancouver engineer who covers the Canadian electric vehicle sector for GreenCarReports.com, said that despite the long-term financial and environmental benefits, Canadian customers are rightly hesitant when considering a shift from diesel to electric fleets.
"The more electric buses you buy, the more money you can save but the more due diligence you have to do."
Even as the price of diesel rises in B.C., Klippenstein said sales numbers for electric buses still lag in the double digits, because cold weather conditions and a lack of infrastructure outside urban hubs make rigorous trials necessary to ensure buses live up to manufacturer claims.
Buses get mixed reviews
Generate Capital announced earlier this week that it is partnering with Chinese manufacturer BYD Co. to offer the electric buses on lease to cities and corporations in the United States.
BYD's record, however, is mixed.
TransLink and some Canadian municipalities have reported positive outcomes from BYD bus tests. As part of a free trial in 2017, TransLink ran a BYD battery-electric bus for 50 days in Vancouver and said the bus met expectations.
However, the L.A. Times reported earlier this year that BYD buses were pulled off roads after they were deemed unreliable by Los Angeles Metro staff.
Generate Capital and BYD are not yet disclosing details of possible Canadian deals, but Shah said that he has taken part in at least 10 calls with potential customers in Canada so far.