One thing I love about this bus is just how quiet
it is.
The electric vehicle revolution is making its
way to a new segment, school busses.
The kids love it because it's something new.
It's something kind of almost space-age to them.
The drivers really like the electric bus, the
features. The students as well.
One of our staff members equated it to the Cadillac
of all buses.
A number of companies are involved from traditional
school bus manufacturers, Bluebird and Thomas Built,
to electric vehicle manufacturers, Lion
Electric and GreenPower Motor Company.
For parents, they know that this is a better ride
for their kids. We know that diesel is a known
carcinogen. It brings along a whole host of
respiratory issues.
They not only smell like really bad, but they're
also extremely noisy.
Prime example of that, the noise of a diesel bus
starting. Whereas for these buses, you don't get
that noise anymore.
And then you get the puff of exhaust.
And if there's people around it, they tend to
get upset. But these don't do any smoke at all.
In the U.S., 26 million children take 480,000
busses to get to and from school every day.
Converting that fleet to electric could have a big
impact.
It's the largest public fleet in the country.
Electric school buses on average have half the
greenhouse gas emissions of any other source.
The industry is poised to take off.
The global electric school bus market is
estimated to reach $40 billion by the end of
2030.
There's at least one electric school bus
committed in 38 states and two tribal nations.
I definitely feel like it's a very cool way to
not only help the environment, but also just
a fun way to travel.
This is where the entire world is going, towards a
cleaner transportation sector.
Transit bus was the first segment to move towards
battery-electric technology. But the school
bus is fast following.
It's a great application.
They're running fixed routes and then coming in
during the day before going out and running
additional routes, in a typical use pattern.
The first electric school buses were deployed in
2014 in California with the Kings Canyon and
Escondido school districts.
Since that time, we've seen some steady growth.
We're still at about 3% of the fleet.
The buses are expensive, about three times more
than their diesel counterparts. But adoption
has been gaining momentum as schools replace their
aging diesel fleets.
There's about 12,700 school buses in what we
call a commitment stage.
So that's either ordered or delivered.
And just in the past six months, we've seen about
500 new electric school bus commitments.
Just like electric cars, the buses benefit from
reduced costs of fuel and maintenance.
You're buying electricity and for most people in
most places, that works out a lot cheaper than
buying diesel or gasoline.
And the maintenance demands are lower.
So less downtime for the vehicle because you simply
don't need to take it out of commission as often as
you need to for a diesel product.
They also come with the added utility of providing
energy storage resources when not in use.
In case of an emergency, we can take one of these
buses over to, say, a school, a hospital, any
place that needs power, and then they could
actually use power from our batteries.
In places like California, where the power grid does
come under significant stress, particularly at
times a year where maybe school isn't in session
and all these buses are sitting in a barn
somewhere. It's just another battery that can
help level load the power system.
Some states have already begun outlining policies
to drive adoption, with some setting ambitious
goals.
New York was the first state to pass a piece of
legislation to electrify their entire fleet.
They have a goal of all new sales being electric
by 2027 and then moving to electrify the entire
fleet by 2035.
There are some states that are trying to nudge school
districts towards electric school buses.
Massachusetts is one, California is obviously
one. Colorado is doing stuff.
2023 is expected to be a big year for deployments,
largely due to federal funding.
President Biden saying that he would like to see
at least 20% of the 500,000 school buses
go electric within the next five years.
Since the infrastructure bill passed, there has
been a process of school districts applying for it,
and then they can do that again next year and this
can go quite a bit of distance towards cutting
that cost differential.
The Bipartisan Infrastructure Act, what
that did was create a new $5 billion clean school
bus program. One half of that funding, $2.5
billion, is dedicated solely to funding electric
school busses, infrastructure, and the
other $2.5 billion is for electric as well as other
alternative fuels.
In Virginia, the Fairfax County Public School
District has been an early adopter of electric
buses. It got started through a state pilot
program in partnership with Dominion Energy.
Fairfax County Public Schools was awarded eight
electric school buses.
We paid the price of a diesel bus and Dominion
Energy, through their program, paid the
difference.
The county began the process in 2019 and hopes
to convert its fleet of 1,625 diesel buses to
electric by 2035.
We have purchased 20 additional busses through
grant opportunities and we expect to receive the
first ten of those before the end of this school
year and then the next in the spring of 2023.
The buses are built by Thomas Built, a school bus
manufacturer that has partnered with Proterra
for battery and electric Drive components.
Even in the year and a half timeframe that we've
had them, there are already updates to the
technology.
And the charging infrastructure was
installed by Dominion Energy.
They installed the vehicle to grid charging
infrastructure, which allows Dominion Energy to
utilize the energy from the bus batteries when our
buses are not in
use.
My bus can come to a complete stop without me
having to touch the brake. There are so many
safety and security built into it.
It makes it a whole lot safer for our kids now
than those old diesel buses.
Right here is our battery gauge.
And then just below it, it tells me my coolant
temperature, my battery temperature and my battery
percentage.
The buses have a range of around 135 miles and take
about an hour or two to charge.
For most school routes, this is sufficient, but it
can be inconvenient.
The only thing I don't like about it is the
battery range. We're having to charge our
batteries twice a day.
They do make batteries for longer range, but we
in Fairfax County, we don't have those yet.
The buses that are coming to us by next spring will
be a version 2 bus and they've learned from
everything that we've had happened to our buses and
they've upgraded it into the next bus.
Both legacy school bus manufacturers and new
startups are building electric, with several
erecting new plants to meet demand.
We looked at one study that looked at the
incentives that are coming under the Clean
School Bus program predicted that 46,000 job
years were going to be added because of the
investments in the electric and the clean
school bus industry.
One legacy company, Thomas Built, owned by Daimler
Truck, has partnered with Proterra to bring its
electric offering to market.
They have about 40% of the U.S.
School bus market. They are working with Proterra,
the battery company, to assemble fast-charging
electric school buses.
Thomas Built is a company that's existed for over
100 years. We are a leading school bus
manufacturer in the US and Canada.
Together with them, so far, we've got 175 school
busses on the roads.
That spans from Alaska to the coast of Virginia and
Massachusetts.
The companies brought their first electric
school bus, the Jouley, to market in 2019.
Since then, they've seen demand rise considerably.
What we're seeing is a steady buildup.
We announced a couple of weeks back that we had
delivered our 200th Jouley. It won't take long
until we deliver the next hundred, because the
scaling impact is real.
Blue Bird is another legacy school bus
manufacturer that's gone all in on electric.
We've been around for 95 years making school buses
and Bluebird is no stranger to
electrification. Our first endeavors in
electrification on school buses started in the mid
nineties. And with our latest generation system
that we've been working on with Cummins, since
2018, we have over 700 electric school buses on
the road today.
The company produces four electric school buses per
day at its factory in Fort Valley, Georgia, with
plans to scale that up to 20 per day by the end of
next year.
We do the school busses from the frame rails up
and on the electric side, we've partnered with
Cummins to provide a full drive train system.
Canada-based Lion Electric is a new entrant into the
market that develops electric trucks and school
buses.
We started the business in 2008.
We started working on the electric school buses in
2010. Took us about six years to launch the first
all-electric school bus that we started selling in
2016.
The company manufactures in Canada and plans to
open a new 900,000 square foot facility outside
Chicago in 2023.
We have a manufacturing capacity of 2,500 units in
Canada and 20,000 units in Illinois, and this will
be the largest EV factory for medium and
heavy duty in the United States and in Canada.
So far, Lion Electric has delivered around 700
school buses. GreenPower Motor Company, also based
in Canada, is focusing on developing electric trucks
and school buses.
We have one of the broadest range of purpose
built all-electric vehicles in the medium and
heavy-duty space in North America.
They just opened or are in the process of opening a
factory in West Virginia specifically to assemble
electric school buses for the U.S.
Market.
The company currently makes two buses.
A 40 foot option and a shorter version.
We already had our 40 foot type D school bus.
We ultimately wanted a Type A school bus, which
is a smaller one, and that was a product that we
just brought to market this year.
In California, we have deployments with up to six
vehicles.
Cost is the biggest obstacle.
Electric school buses are currently around 2 to 3
times more expensive than their diesel counterparts.
We pay about $122,000 for a large diesel bus
and with our electric bus, with all the Fairfax
specifications, we're looking now at about
$419,000 a bus.
The high price means most school districts will have
to adopt these slowly.
For Fairfax County Public schools, its annual
upgrade costs will go up considerably.
We have a 15 year replacement cycle for our
buses and we have a budget of about $10
million to replace buses and we usually replace
about 120 to 130 busses a year.
With our Jet Initiative, to convert the fleet fully
by 2035 means that our budget needs to be
increased substantially over the next 15 years to
meet that goal.
Buses do well in terms of cost of ownership from
there, but that's a big nut to digest.
And so the funding programs that are
available are absolutely essential to kind of get
the momentum going.
But it's predicted that over time costs will come
down.
This is one of those things where once the
scale starts to go up, the costs will hopefully
come down and then everybody can have one in
a few years.
By the end of this decade, we're anticipating that we
get to total cost of ownership parity.
On top of the cost of the bus itself, the schools
also need significant infrastructure upgrades.
They're going to have to install chargers.
You're going to have to get a mechanic who
understands how to maintain these things and
keep them on the road. And so there's some sunk
cost up front.
We only have enough chargers for our buses
right now. We don't have any extra ones.
When a charger fails, we can't charge the bus.
So then we have to hop into a diesel bus to
continue our runs.
We're seeing this with electric vehicles overall.
We do need to make investments on our grid,
especially if you're thinking about developing
an entire fleet of electric school buses.
Despite these hurdles, many in the industry
predict it won't be long before we reach an
emissions-free future for school buses.
The nonprofits that I've talked to that are trying
to move this along say, we want every bus by 2030,
by 2030. By 2030.
It's plausible that most U.S.
school busses, most of those 480,000 school
busses, could be electric, if not by 2030,
then by 2035.
Even in Canada, in the province of Quebec, every
school bus purchased going forward has to be
electric. As more and more states jump on these
mandates to go electric, we'll see this continued
adoption. And this $5 billion in federal funding
over the next five years, it's just been a great
tailwind to increasing this adoption.
It's really an exciting time to be in the school
bus business. It's transformational and it's
an industry that typically is not going to
be leading transformational changes.
We're going to see a lot of momentum over the next
five years as we see investments, as we see
buses taking off. We've seen now over 22 different
models of electric school buses.
All school districts will adopt the electric school
bus technology into their fleet.
We're at the very start of it, and at this point,
I don't think there will be any turning back.