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Publication(International Finance Corporation, Washington, DC, 2020-01) Graham, JohnWhat are the critical questions to ask if one is contemplating an e-vehicle program? Based on the technical and business proposals International Finance Corporation (IFC) has seen so far, this report presents some factors for e-bus proposals. The broad-based electrification of buses and other urban transport represents a massive investment opportunity for IFC and other investors to invest in higher quality, sustainable transport while addressing climate change and improving air quality. At the same time, this sector is beset with some of the trickiest issues related to transport infrastructure, power, municipal finance, and even local politics.
Publication(International Finance Corporation, Washington, DC, 2020-01) Graham, JohnElectrifying the global urban vehicle fleet depends on the convergence of several economic, technological, and political factors. However, the big shift to electric vehicles will likely take place only when the economics of owning and operating electric becomes a no-brainer. Using the example of electric buses, two factors must fall into place before the electric option can take off: first, the upfront cost needs to come down and second, there needs to be a change in procurement culture towards lifecycle cost or total cost of ownership (TCO). If utilities can structure out fluctuations in power costs (through PPAs) and the marketplace moves to leasing and other fixed-price operations and maintenance arrangements, these calculations can standardize across the board quickly. This is when the math starts to get a lot less fuzzy.
Publication(International Finance Corporation, Washington, DC, 2020-01) Graham, JohnDozens of municipalities are experimenting with e-buses, while some last-mile delivery companies are using pilot fleets to test performance. At the same time, a smaller group of operators are pushing ahead with more drastic, big bang efforts to put dozens or even hundreds of electric vehicles into service. The authors saw how some locations have already reached total cost of ownership (TCO) parity, while other places will require further reductions in costs and perhaps some forward-thinking tax and tariff policies. The bad news is that the track record for electric buses to date has been mixed, and e-bus adoption has not scaled up as fast as many had hoped due to institutional, technical, and financial challenges. For those seeking to stay the course with internal combustion engines, there are plenty of valid arguments. This report will bring some of the problems out in the open.
Publication(International Finance Corporation, Washington, DC, 2020-01) Graham, JohnThere is a quiet revolution underway in a previously sleepy segment of the transport sector: the electrification of municipal buses and other intra-city vehicles. As McKinsey reported last October, the compound annual growth rate of battery-electric buses has exceeded 100 percent since 2013- surpassing that of every other electric vehicle segment. Investing in battery-electric buses - as well as other high-use vehicles, such as e-delivery trucks - is an effective way for International Finance Corporation (IFC) to move the needle on air quality and greenhouse emissions from urban transportation. The opportunity is massive, and IFC has the capacity to fast-track implementation. It’s time to hit the accelerator. A cocktail of technology, investment, and scale in electric buses (and other high-use intra-city electric vehicles) will soon reach a point where reliability and cost advantages create the death spiral for internal combustion engines. Superior technology and declining costs will eventually overwhelm the old, static, diesel driven transportation paradigm.