Tech

These 3 companies could cash in on Biden’s $5 billion electric school bus plan — if they can convince skeptical customers to ditch diesel

  • The long awaited infrastructure deal aims to electrify the nation’s fleet of school buses.
  • Only a handful of companies making electric buses are likely to receive the funds.
  • Here’s how executives at three of those companies say they plan to bid for the money.

The bipartisan infrastructure bill steadily moving toward Joe Biden’s desk includes a sizable chunk of money to reinvent how kids across the country get to school by adding a tinge of green to the trusty yellow school bus. 

The $1 trillion infrastructure bill earmarks $5 billion to transition school buses across the country — nearly all of them diesel-powered — to cleaner energy sources. And while that pot of money will only cover a fraction of the cost of electrifying the country’s 500,000 yellow buses, manufacturers will have a chance to cash in on an emerging revenue stream. 

The $5 billion would presumably be distributed to states and local school districts. They would put out requests for proposals, and manufacturers could bid for the right to build the next generation of school buses. 

Biden’s looking to electrify about 20 percent of the bus fleet within 5 years. With less than 1 percent of it currently electric — and an electrified bus costing about 3 times as much as a new diesel one — winning these sorts of contracts will be critical for bus makers as more districts commit to going green.

“For ourselves and the few other players in the industry, it’s the spark that lights the fire,” Fraser Atkinson, CEO of bus manufacturer GreenPower Motor Company, told Insider. 

For IC Bus, Navistar’s school bus arm, vying for funds starts with gauging a district’s needs. The money available and how buses are used differs from place to place, factors a manufacturer should consider when bidding for a new contract, Trish Reed, IC Bus vice president and general manager, told Insider.

“What are the routes, what’s the temperature outside? We want to make sure we can heat and cool these buses without reducing range. Or what are they going to be using the buses for?” Reed said. “Is it just their typical pick-up, drop-off routes? Are they going to have to be using this bus for activities or field trips? Really just understanding the customer’s needs first. If electric works, that’s fantastic.”

IC Bus went through this process before delivering its first 18 electric school buses to a Canadian school district in May. It is building another 100 for use in California.

The Lion Electric Company is transitioning school bus fleets to zero-emissions. The Canadian bus maker developed a 100- to 155-mile range electric school bus and plans to manufacture 10 of them for the Los Angeles Unified School District. It’s an early run before the company scales production at its new manufacturing site in Joliet, Illinois, next year.    

“We’re in the business of building and selling school buses, but we do have a vested interest in these programs being successful,” said Nate Baguio, Lion’s US head of sales, referring to the grant projects that determine how to disperse the funds. “As far as the grant funding, we’d pursue it with vigor and we’d like to see those dollars go where they’re going to be most effective.”

This could mean prioritizing the electrification of fleets in lower income areas, where 60% of students ride the bus, according to the Bureau of Transportation Statistics. These students can be disproportionately exposed to diesel buses’ harmful emissions.

GreenPower Motor’s approach is simple: offer the right price and technology.

“Our strategy has always been to have a compelling product from a price point and a technology perspective,” President Brendan Riley said. “When people have a choice, if it’s about the same price point, between a Tesla and a Chevy Bolt, people typically pick the Tesla. That’s where we really see our product.”

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