BYD has announced a new electric bus leasing program in partnership with Generate Capital. The new program is seeded with an initial $200 million investment that is geared towards lowering the barrier to adoption for electric vehicles for public and private-sector buses.
The move allows public transit and private fleet managers to shift the higher up-front cost of battery electric vehicles from a capital cost to a monthly operating expense. Electric buses – and vehicles in general – cost more up front due to the higher relative cost of batteries but pay out over the longer haul with their reduced month to month expenses for fuel costs. Transitioning from a purchase model to a long term lease model allows these managers to pay for the buses from existing vehicle purchase and fuel cost expense line items.
“We founded Generate Capital to bring precisely this type of proven solution to the world,” said Scott Jacobs, Generate Capital’s CEO and co-founder. “Electric buses produce almost no greenhouse gas emissions; they’re cheaper to operate than diesel buses; have lower maintenance costs; and they’re quieter and more pleasant for the rider. Traditional leasing companies typically don’t value any residual in electric vehicles, which makes financing difficult. Programs like these are an all-around win for project developers, customers, and for the environment.”
An early adopter of BYD’s buses, the Antelope Valley Transit Authority (AVTA) in the high desert of Los Angeles County calculated a savings of more than $46 million over the lifetime of its fleet purely as a result of going electric. On an annualized basis, AVTA estimates it will save $46,000 per bus per year, which in and of itself is an impressive number.
Electric vehicles have lower fuel costs, lower regulatory overhead, and lower maintenance compared to their internal combustion counterparts. As a nice cherry on top, they also eliminate point of use emissions and drastically reduce the amount of noise generated by transit fleets.
BYD president Stella Li stated that, “BYD’s mission is to fundamentally change the world by reducing our dependency on carbon-based fuels through the development and advancement of battery and electric vehicle technology. This partnership will be critical in that effort by creating new financing alternatives to a broader range of clients.”
Bus fleets are set to rapidly transition from combustion engines to electric vehicles as battery costs continue to fall and more manufacturers offer longer range buses. Bloomberg New Energy Finance’s 2018 EV Outlook report from May 2018 forecasted that 84% of all transit bus sales would be electric by 2030. Lowering the up-front barrier to entry will help more bus operators make the transition to electric vehicles sooner rather than later, which is a clear win for BYD but also for the planet, as responsible citizens around the world attempt to rein in global transportation emissions. I must add that it would be a great delight to see the Lagos BRT Buses turned to Electric to avoid the noise and fumes that comes from it. And then every other part of Nigeria.