By Mike Stone
A recent report from Bloomberg New Energy Finance (BNEF) shows China is pulling ahead of the rest of the world in electric bus deployment.
While the rest of the world waits for electric buses to make economic sense, China has 99% of the global fleet, the report says.
China is using a vast domestic market to nurture a manufacturing base while tackling emissions and reliance on foreign oil, says Electric Buses in Cities, which was commissioned by the C40 Cities Climate Leadership Group.
C40 is a network of megacities which has the laudable goal of combating climate change and improving the health of 650-plus million citizens, largely through reductions in greenhouse gas emissions.
One way to help this goal is the electrification of largely diesel-powered public transportation. Unfortunately, upfront costs for electric buses are higher than those for conventional vehicles, and this is the main barrier to replacement.
Falling battery prices, fighting pollution
The report predicts that the costs should fall sufficiently for electric buses to reach unsubsidized upfront cost parity with diesel buses by around 2030.
By that time, says BNEF, battery costs will have fallen to 8% of the total e-bus price, down from around 26% of the total price in 2016.
However, despite the activities of a few key cities, of the estimated 385,000 e-buses on the road today, only some 4,000 of them are operating outside China.
Of these, 2,100 are in Europe, accounting for 1.6% of the entire municipal bus fleet, and just 360 (0.5% of the total number of vehicles) are in the US.
In contrast, China’s fleet is now 22% electric, and purchases of electric buses grew by 69,000 units in 2015 and 132,000 units in 2016.
China’s 99% dominance
To put the sheer numbers of vehicles being deployed into perspective, every five weeks China adds the same number of electric buses to its national fleet as all the buses in London.
This phenomenal rise is the result of a coordinated countrywide policy designed to combat air pollution and create a strong domestic market for e-buses and the batteries which power them.
By ramping up manufacture, China will be even better placed to drive down its already low costs and export the technology, should worldwide demand grow as BNEF expects.
Until recently, Chinese urban and industrial growth raced ahead with little regard to environmental impacts, resulting in huge levels of pollutants such as nitrogen oxides and particulates, which are having major health impacts.
Subsidies to boost adoption
One of the big culprits of this pollution is municipal buses, largely fueled by diesel.
To help combat what was becoming a major health emergency, national and regional purchase subsidies (active until 2016 but now terminated) brought the upfront price of an e-buses to a similar level as their diesel equivalents.
As a result, according to the BNEF report, major cities such as “Shanghai and Shenzhen have stopped purchasing new internal combustion engine municipal buses and are only buying electric.”
China also wants to reduce its mushrooming reliance on oilimports, and it appears that electrically-powered mass transportation is part of this strategy.
Indeed,a recent articlesupports the idea, stating that electric buses save the planet the equivalent of roughly 279,000 barrels of oil every day.
Reducing oil consumption, boosting manufacturing
Given that all but 1% of those electric buses are in China, nearly all these barrels are equating to savings for the Chinese economy.
Unsurprisingly, this turbocharging of the domestic market has helped ensure that Chinese manufacturers such as BYD and Yutong are succeeding abroad.
However, says BNEF, the local knowledge of bus manufacturers such as Solaris, Optare, VDL, Volvo or Proterra give non-Chinese suppliers some advantages in US and European markets.
The report also deals with a number of strategies being pursued to kick-start electric bus adoption outside China, essentially by lowering upfront purchase costs in subsidy-phobic territories through schemes such as battery leasing.
These mainly city-based and regional initiatives are having some encouraging effects.
However, the report is also clear national initiatives are essential for the large-scale adoption of electric buses—something that China’s centrally-planned economy and autocratic administration is already delivering very effectively.
- LG Chem is looking for a senior engineering manager. If you’re interested, check out our jobs board now.