US electric bus manufacturer Proterra is scaling up its battery leasing program, removing one of the largest barriers to widespread e-bus adoption as it looks to put its buses on even footing with diesel counterparts when it comes to upfront costs.
Proterra announced it is partnering with Japanese company Mitsui & Co. to create a $200 million credit facility in support of the company’s battery lease program. The investment will help to make Proterra’s electric buses more affordable for more transit customers, and should help fleets go electric on a larger scale.
The most obvious benefit to Proterra’s program is its savings in upfront costs. While some municipalities and organizations are reluctant to buy electric buses due to a higher upfront price compared to diesel buses, Proterra’s program allows transit customers to purchase the electric bus separately from its battery, which the company says makes its electric bus “roughly the same price as a diesel bus.”
Customers pay to lease the battery separately, and Proterra points out that operating funds which would have gone toward fuel in diesel buses can now be earmarked for the battery lease payment.
The battery lease program lasts 12 years, which Proterra owns and guarantees the performance of “through the life of the bus, decreasing operator risk.” The batteries also come with a performance warranty and a midlife replacement.
Proterra and Mitsui also announced an effort to use batteries from the leasing program in “secondary applications after the end of their useful life in a vehicle.” Matsui’s Yosuke Matsumoto said in a release,
“We’re seeing innovation both in technology and in businesses around the mobility sector. We are pleased to take an initiative to support the transit industry alongside Proterra, as the company expands its battery lease program to enable the rapid adoption and a broader commercialization of its electric buses. There is a unique opportunity for markets to provide the necessary capital to accelerate the imminent transition to 100 percent battery-electric bus fleets and reduce carbon emissions.”
Some Proterra customers have already been using the company’s leasing program, including Park City, Utah. Park City plans to lease more batteries for its Proterra Catalyst buses as it aims to meet a 100% electric goal.
Proterra recently announced a major order of 20 Catalyst E2 buses to the University of Georgia, and the company also secured $155 million in funding from Daimler last year.
As Proterra continues to scale up with more capital, one can see the potential for the electric bus market to finally take off a bit more in the US. That University of Georgia order was big for a US transit customer, but it doesn’t compare to what we’ve seen recently in Paris, and it certainly doesn’t compare to what China is doing.
We recently saw a report from the CBC about how one Canadian town picked diesel over electric buses solely due to price, despite a desire to go electric. How many communities have done the same, and how many might choose differently if upfront costs are equal?
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