KLIMAWIRE | In 1925, a Georgia Ford dealer named Albert Luce attached a wooden car to the top of a Model T frame and sold it to a cement plant owner who wanted a way to transport his workers.
The idea became a business and almost a century later the company – Blue Bird Corp. known as – has become one of the largest builders of school buses in the country.
To stay ahead, however, Blue Bird is transforming again. The company is focusing more of its business on electric school buses, even as it continues to roll out the same diesel-powered models that have taken kids to school for generations.
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Blue Bird’s – and its competitors’ – new focus is due in part to the revenue the Biden administration has funneled into the industry.
The bipartisan infrastructure bill provided $5 billion, overseen by the EPA, for school districts to purchase new buses. And the Surge Inflation Act provided billions of dollars more in subsidies and tax incentives to pay for factories and battery plants.
But industry officials say the switch to electricity was happening before President Joe Biden took office. That’s why they say they’re hopeful the transition will continue regardless of who wins the White House in November — even though there’s a clear divide between Vice President Kamala Harris and former President Donald Trump in favor of electrification.
“We’re going to be in this business for a long time,” said Albert Burleigh, vice president of alternative fuels at Blue Bird.
The company expects to double its e-bus sales from 546 in 2023 to 1,125 in 2025. And the new line could account for 40 percent of the company’s sales by 2027: 4,000 to 5,000 buses among 11,000 to 12,000 total sales.
Blue Bird’s two biggest competitors, Thomas Built Buses and IC Bus, are also actively preparing for the electric market.
Thomas Built, owned by Daimler, has a factory in High Point, North Carolina, and its 1,000th. sold the electric bus earlier this year. The company added a third shift at its plant in 2022 to keep up with demand and created a consulting group in 2023 to help customers plan electric buses.
And IC Bus—based in Tulsa, Oklahoma, and owned by Volkswagen’s Traton division—says school buses are a good fit for electrification.
“With a defined route and a central depot, school buses are ideal for the transition to electric,” the company says on its website.
The e-bus industry began in the U.S. in 2014, when a handful of California school districts began buying electric buses to meet state emissions requirements, according to a report by the World Resources Institute.
Another catalyst came in 2016, when Volkswagen agreed to pay $14.7 billion to settle allegations that it had cheated on its emissions report. The agreement allocated $2.7 billion to individual states to fund clean air projects, many of which were earmarked. elimination of diesel school buses.
Over the next few years, California provided $70 million in state funding for electric school buses, and Dominion Energy announced it would subsidize some of the costs of Virginia’s 50 electric school buses.
The idea has a lot of appeal: electric school buses can help reduce greenhouse gas emissions and also reduce the output of soot and other pollution that can endanger children’s health.
Harris has been a big pusher. As a senator, he introduced “The Clean School Bus Act of 2019,” which sought to create the first federal grants for school districts to purchase electric school buses.
It died without action in a Senate committee, but the school bus program in the 2021 infrastructure bill looked a lot like Harris’ bill. When the EPA announced program first aidHarris participated in the event, “Who doesn’t love a big yellow bus?”
The EPA has awarded about $3 billion in infrastructure act grants that paid to replace about 8,700 buses. Of these, about 95 percent are electric. The agency began taking orders in September for the fourth round of buses, totaling $965 million, which will leave about $1 billion to distribute.
Federal funding has made a difference.
Blue Bird won an $80 million grant from the Department of Energy earlier this year that will help it build a new power plant from its existing site in Fort Valley, Georgia, creating 400 jobs in the process.
Government dollars have not changed the fortunes of all e-bus companies. Lion Electric, a Montreal-based company that makes electric buses and trucks, It gave him 38 million dollarsAs part of the EPA’s Clean School Bus Program. But the company said it was laying off hundreds of workersafter losing $41 million in the first six months of the year.
Much of the industry, however, is poised for growth. Half of the nation’s 515,000 school buses are more than 10 years old, and there is demand from school districts that are cutting back on bus purchases during the Covid-19 pandemic.
Peter Gould, a lobbyist at Boundary Stone Partners, said the trend toward electric school buses is likely to continue when the federal money runs out. Boundary Stone works on behalf of clean energy companies and provides assistance with federal funding, according to its website.
“Thanks to these grants and incentives, the hundreds of school districts that have begun their fleet transition have taken the first tough steps in the process and are laying the groundwork for ongoing electrification planning and service coordination going forward, facilitating future sales and expansions in future rounds,” he said.
The EPA’s greenhouse gas regulations for heavy trucks are also likely to give the industry a boost, along with the state’s clean air plans. The EPA plan is expected to encourage the industry to electrify about 17 percent of all heavy-duty vehicles by 2032.
California’s regulations, which have been adopted by several other states, aim to phase out most fossil fuel-powered trucks by 2036.
States may be drivers of demand and sources of funding, said Brittany Barrett, deputy director of implementation and operations for the World Resources Institute’s electric school bus initiative. WRI started the electric school bus program with funding from the Bezos Earth Fund.
“Two-thirds of all committed school buses were funded by the EPA to date, but you continue to see new funding at the state level,” Barrett said in an interview.
Trump and congressional Republicans have generally made EVs a campaign issue. Trump has warned, without evidence, that a Harris administration will force consumers to buy electric vehicles and threatens electric vehicles. the nation’s electrical supply.
A Trump campaign spokesman did not respond to an email seeking comment.
Republicans on the House Energy and Commerce Committee issued a staff report in September that called the EPA bus program a failure. It largely repeats information from the EPA inspector general’s office, but has made suggestions for improving the program found no evidence of fraud.
The report highlights the high price of electric buses — one costs $200,000 more than a conventional diesel bus — and warns that batteries and other components may come from countries with poor human rights records, such as China.
Those concerns don’t seem to affect bus manufacturers.
Although electric models cost more to purchase, they are cheaper to operate and require less maintenance than diesel buses and will soon have cost parity over their lifetime cost of ownership, according to Blue Bird with Burleigh.
The company buys its batteries and engines from a division of Cummins, the longtime diesel engine maker in Columbus, Indiana.
Tratone, who owns IC Bus, said its profits grew in the second quarter of this year. Daimler’s profits fell compared to the same period last year, but it came after two years of rapid growth. Neither company breaks down bus sales.
Blue Bird’s share price is up about 58 percent since the start of the year, and the company is pushing into new lines of business related to electric buses.
He is looking into ways to start recycling batteries. And it created a joint venture called Clean Bus Solutions, which aims to offer electric buses as a service, allowing school districts to manage bus purchasing, charging and availability issues with a single contract, according to Burleigh.
“I think there’s still a path for electric school buses to continue to be a big part of the industry, whether that’s a Democratic or a Republican administration,” he said.
Journalist Thomas Frank contributed.
Reprinted E&E News Courtesy of POLITICO, LLC. Copyright 2024. E&E News provides essential news for energy and environmental professionals.
