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The impressive deployment of electric buses in China has been the center of much attention, but what is the situation in Europe? Are electric buses ready for mass deployment or will the Old Continent by lagging behind? This paper examines the trend, the economics and challenges to conclude that electric bus market is on the verge of a tipping point in Europe.
The European market is quickly ramping up. In 2017, the number of electric bus orders more than doubled (from 400 in 2016 to more than 1,000); the next years are projected to follow the same tendency as manufacturers scale up production and their offerings. In 2018, the market share is estimated to be around 9%, marking the transition from niche to mainstream and the beginning of a steep and necessary uptake curve.
Diesel buses are a heavy cost on society and the climate through air pollution, noise and greenhouse gas (GHG) emissions. Electric buses already offer a better total cost of ownership (TCO) than diesel buses when these external costs are included. When only health costs are considered (air quality and noise), electric buses are roughly on parity with diesel buses.
Electric buses offer many additional benefits compared to their fossil counterparts. They have superior image and comfort, avoid stranded assets from investing in gas infrastructure, use locally produced (renewable) energy and ensure energy sovereignty by displacing oil consumption. The bottom line is clear, the earlier cities transition to a zero emission bus fleet, the better. To expedite this transition, cities, procurement authority and public transport operators need to:
• Embrace the future and start to procure electric buses en masse to replace their aging and polluting fleets and to live up to some of the century’s biggest challenges.
• Communicate to manufacturers urging them to ramp up scale of production which in turn would reduce prices.
• Have a TCO-focused approach by shifting from upfront payments to lease or loan payments aligned with the durability of the asset to cover full lifetime over a long period of time.
• Include external costs in the tendering process when comparing different options.
• Seek and encourage new financing mechanisms from traditional funding institutions. In particular, investigate EU grant options (CEF, ERDF and Cohesion Fund) and low-interest loan options from EIB.
The EU also has a role to play to reach its climate targets, initiate a pathway towards decarbonisation and preserve the health of its citizens. To drive this change, we recommend that EU policymakers:
• Incentivise and deploy financial instruments to fund the deployment of zero-emission buses though CEF, ERDF or Cohesion Fund grants and low-interest, long-term EIB loans. In particular a grant ranging from €30,000 to €50,000 (depending on Member State’s GDP) should be made easily accessible directly to cities.
• Set a zero-emission bus mandate as part of the HDV CO2 emissions standards for both 2025 and 2030.
• Exclude gas vehicles from the scope of the Clean Vehicle Directive as gas buses offer no real gains compared to diesel buses and can’t be considered “clean”. From 2030 all newly procured vehicles should be zero emission.
• Consider a temporary additional weight allowance for zero-emission buses to limit the passenger restrictions due to the additional weight from the batteries.