A vehicle that gets 22 miles a gallon might not immediately sound great, but if you are in the mass-transportation business -- or more specifically, if you are managing a fleet of buses -- that figure will most likely grab your attention.
In this business, you are more likely to deal with numbers like 4 miles per gallon for diesel buses, or even 3.5 for CNG vehicles. So, in that context, 22 miles per gallon is, quite literally, a whole order of magnitude better. And 22 miles per gallon equivalent (mpge) is what electric bus company Proterra is offering the market, and it's gaining momentum even as oil prices remain low.
TriplePundit spoke to Matt Horton, Proterra's vice president of sales, upon the news that the company’s buses have surpassed 2 million miles of service in the United States. The company operates 63 buses across Texas, California, Massachusetts, Nevada, Kentucky, Tennessee, Florida, South Carolina and Washington. It claims this has saved over 420,000 gallons of fuel and averted 7.6 million pounds of carbon dioxide emissions.
“The best sales have been in a year with the lowest fossil fuel prices,” said Horton, explaining the company’s growth in orders over the last 12 months. This has put pressure on production of the vehicles in the company's Greenville, South Carolina, facility, resulting in a backlog of over a year’s worth of orders. The timing, then, is perfect for its new Los Angeles factory which is poised to start production later this year to help meet the growth in sales.
This is a time of considerable change at Proterra. Six months ago, the company relocated its headquarters from South Carolina to Burlingame, California. The move, Horton told us, has been perfect “to make sure we are right in the electric vehicle nerve center.” The company has been pleased with the number, and quality, of individuals they have been able to hire in Silicon Valley, which Horton said is allowing it to build “a world-class battery engineering team.”
Proterra already has 15 different transit agencies as customers. The reason the company is enjoying sales growth is a result of both environmental factors and, possibly even more importantly, because of sound economics.
Taking the environmental case first. Back in February, the company announced that it would begin supplying buses to the University of Montana, its first university customer. The Associated Students of the University of Montana (ASUM) ordered two 40-foot Catalyst Fast Charge buses, ASUM being one of a handful of student-led agencies. “Students are interested in sustainability in campus transportation,” Horton explained, adding that the student-led agency reached out to Proterra as it looked to reduce its carbon footprint in campus transportation.
But as well as environmental consciousness, environmental regulation plays a part, too. Horton explained that at the state level, the California Air Resources Board, for example, has ongoing funding for zero-emissions transportation, while at the federal level, the “FAST Act” signed into law in December 2015 offers long-term funding, too.
But while Horton told us that the state of California wants to add no more fossil-fuel-powered mass transit vehicles in 10 years time, the company thinks the state will get to that point before the regulators will make it a requirement -- because of the second reason, the economic one. Proclaimed Horton: “Fundamentally, growth will be driven by markets, not regulators.”
For example, electric buses have a compelling performance case. Horton pointed us to a report by the National Renewable Energy Laboratory (NREL), which undertook a study of one deployment of Proterra buses at Foothill Transit, and found that its buses are four times more efficient than compressed natural gas (CNG) buses while being three times more reliable. This means lower overall operating costs and less time out of service for repair.
In addition, Horton told us transit managers tend to be seasoned professionals, many of whom have been in the business for 20 or 30 years. They don't put too much stock in today's low oil prices, having seen many cycles of price spikes and slumps, and so prefer to take the long view. Horton explained that what transit managers hate is price volatility in their No. 1 operating cost -- diesel. By contrast, electricity costs are both much lower and much more stable than oil. In fact, Horton said, the current low cost of oil provides an opportunity: “Smart transit operators are taking capital now [from savings in fuel prices] and making investments in electric vehicles that will reduce their long-term operating costs.”
But do Proterra’s buses perform sufficiently well to take on the heavy-duty rigor of their fossil-fuel-powered counterparts? The company thinks they do. Proterra’s bus equipped with an extended-range battery is capable of 258 miles between charges -- which, when compared with the average duty of 120 to 140 miles in the typical “day-in-the-life” of an urban transit bus, is plenty of range.
Electric buses are well suited for the stop-start nature of urban routes. For longer distance hauls, Proterra's bus equipped with the fast-charge battery has been able to go 724 miles during the course of a single day, which bodes well, provided the charging infrastructure is available.
Still, the proof of concept appears to be in what Proterra told us has been a phenomenal year for sales and, certainly, Horton is bullish on the future. “This is the most exciting time in the transportation market in maybe 100 years,” he said, adding, “So much is changing, so quickly.”
Image used courtesy of Proterra
Phil Covington holds an MBA in Sustainable Management from Presidio Graduate School. In the past, he spent 16 years in the freight transportation and logistics industry. Today, Phil's writing focuses on transportation, forestry, technology and matters of sustainability in business.