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Are hybrid and electric buses viable just yet?

Alejandro Hoyos Guerrero's picture
Photo: Volvo Buses/Buses Fan
Hybrid and electric buses may be the future of public transport. But today, they are costlier than their diesel equivalents. Therefore, their implementation requires that private operators be subsidized, or that the higher costs for public operators be covered. For now there are more efficient alternatives for reducing GHG and local emissions.

The most significant emissions reduction will not come from the vehicles; it will come from people leaving their cars at home.

Let’s take the example of a Mexican commuter who chooses whether to ride a bus or drive to work each morning. If she drives, her commute will generate 8kg of CO2, vs. only 1.5kg when riding a diesel bus. By making the greener choice, she is saving up to 6.5kg of CO2. With a hybrid bus, that same ride would emit 1kg of CO2, and zero emission with an electric (assuming zero-emission grid)—translating into additional savings of 0.5kg and 1.5kg over a diesel bus, respectively. The extra savings are welcome, of course, but they pale in comparison to the emissions reduction generated by shifting from a private car to a public bus.

If we analyze a whole system instead of an individual, technology’s potential to reduce emissions gains importance, but is still lower than that of modal shift. That means we first need to focus on providing incentives for drivers to leave their cars behind and turn to public transit. When a bus system with exclusive lanes opens, for instance, 1%-5% of passengers are likely to be new riders who used to drive and made a conscious decision to switch. This proportion can increase to 10-15% with the right ancillary interventions, such as providing non-motorized transport infrastructure, improving accessibility and service quality.

Another great source of emission savings is a more efficient system. We have seen reductions of up to 30% in vehicle-kms after a system reorganization. The following graph compares the potential emission reductions of modal shift and fleet rationalization by shifting vehicles to hybrid (left column) or electric (right column) technology.
Potential CO2 reduction of different measures. Simulated 30-km 150,000 daily passengers BRT corridor.
The bad news: hybrid and electric technologies may not be cost efficient yet due to battery prices

We compared the cost of hybrid and electric technologies vs. diesel over the entire life-cycle of a bus, and assumed:
  1. Acquisition costs: 60% higher for hybrid buses, and 100% for electric buses.
  2. Vehicle Operating Costs (VOC): fuel represents 40% of the total life-cycle costs of diesel buses. Lower consumption by hybrid and electric buses translates into savings of up to 15% in VOC for hybrids, and 40% for electric buses.
  3. Battery replacement: batteries typically need replacing after 6 to 8 years, while the lifespan of buses ranges from 10 to 12 years… meaning batteries need to be replaced at least once during the life-cycle of a bus. Battery replacement represents 15% of the purchase price of a hybrid bus, and 50% of the price of an electric bus.
The result? Subsidizing hybrid buses costs US$100-US$250 per ton of CO2 saved, and up to US$750 for electric buses… due in large part to the prohibitive cost of batteries.

The good news: the cost of batteries is plummeting.

The price of batteries would need to fall 26% to make emissions reductions cost-effective enough that they would justify public subsidies. To make hybrid buses commercially viable, the price would have to decrease by 45%. These figures are 75% and 90% respectively for electric buses.

Although we are still far from the 90% price reduction needed to make electric buses viable, a 45% reduction is just around the corner. In the last 10 years, battery prices have plummeted by up to 90%. Although this drop in prices has begun to slow down, projections indicate that we are most likely to achieve the required price reductions between 2020 and 2025.

Then shouldn’t we support the development of these new technologies? It depends on the context...

Supporting hybrid and electric technologies can boost industrial capacity and keep batteries prices falling. This is most likely to happen in places where mass transit is provided by public operators and national bus industry. Conversely, in fiscally constrained developing countries with private operators, pushing these technologies too early could harm both the public budget and the financial sustainability of transit systems.
Distribution of battery-powered electric bus (blue) and hybrid bus fleets (orange) around the world.
Source: Xiangyi Li/WRI
Please tell me I´m wrong.

Most of the data in our models are from 2014 and older. With increasing frequency, we receive news that hybrid technologies are commercially viable. One of the reasons for writing this blog is to contribute to the ongoing dialogue. We will continue to research, update data, and improve models. In the meantime, nothing would make me happier than to receive new information, models or analysis so we can finally publish a post titled “New bus technologies are cost efficient.”

Please look at this technical note for references, assumptions, and methodology.

Comments

Submitted by Ben Gericke on

I think we have to radically change our thinking of urban transport. With the ongoing price reduction of batteries, the cost of electric vehicles will also reduce. In addition, there are the significant developments to improve ride-sharing and the use of driverless vehicles. A combination of these last three will make ride-sharing very economical and it may even replace the need for buses, especially on the end-parts of the bus routes. Having three and four passengers in a ride-share vehicle will not only reduce the need for public transport, it will also significantly reduce the need for on-street and off-street parking.

Submitted by Alejandro on

Thanks Ben for your comment.

I agree that we face a big challenge in understanding how new technologies will shape the future of transport. All over the World there are new initiatives, sometimes in the informal paratransit sector that can be the seed for your radical change. I agree that mass transit may not be the key factor for transport in the future, as even now it isn't (in many developing countries paratransit services account for two thirds of public transport services). Still, I think the discussion on technology is relevant: First, because it is the governments who bring it to the table. Second, because under certain conditions like high density demand, given that road space is limited, only mass transit systems are efficient.

Submitted by Casper on

Besides reduction of CO2, hybrid and electric technologies save NOx, PM and noise-pollution. You can monetize these gains as well. The noise reduction could have more social impact than the reduction of CO2.

Submitted by Alejandro on

Hi Casper,

Thanks for the comment. You can take a look at the technical note. We are including PM (US$20,000 per tonne), NOx (US$1,500 per tonne) and CO (US$500 per tonne) economic value of potential savings in the analysis.

We are not including noise, and would appreciate any good methodology on how to do it.

Thanks!

Submitted by Luis Belalcazar on

In Bogota Life Cycle Analysis show a passenger using an electric private car produces the same emissions per passenger than a passenger using public transport. see more details at: https://www.researchgate.net/publication/312498592_Life_Cycle_Emissions_from_a_Bus_Rapid_Transit_System_and_comparison_with_other_modes_of_passenger_transportation

Submitted by suprotim de on

Running a hybrid bus is actually cheaper and the net profit that is obtained is almost double than that of an ICE bus. The challenge with hybrid and the electric bus is the high upfront cost which makes it unviable for prospective operators when we consider depreciation and total ownership cost. Also, hybrid and electric bus manufacturing is a more oligopolistic market so unless there are more players coming up the cost economics just don't seem in favour of an electric and hybrid bus.

Submitted by Pedro Cárdenas on

Bus batteries are now guaranteed for 12 years, so no replacement is needed. That changes the whole equation

Submitted by Rafael Fonseca on

I conducted a study in 2015 that demonstrated the feasibility of BYD buses in BRT Transmilenio in Bogotá to 15 years without subsidies.

Submitted by Mauricio Esguerra on

Very good article explaining the economical side of electrification. However, no mention was made to opportunity charging via inductive wireless power transmission. This is the proven solution to keep vehicle cost at the level of conventional diesel due to a very reduced battery pack (by 80%) as compared to overnight charged e-buses. This is very appealing for private bus operators which will have lower operating costs over the lifetime of the vehicle. The cities need to provide the necessary infrastructure to charge every 2nd or 3rd bus stop at 200 kW. For a BRT system it amortize quickly given the very small maintenance of a street integrated infrastructure. Please check this for more information: https://t.co/ZBHhfHwzLx

Submitted by L.Hunter on

The city from which your main image is taken (Gothenburg, Sweden) has gone from being a seriously polluted industrial city to a being a place with remarkably clean air. Traffic is smooth, quiet and calm. Unlike many other cities, Gothenburg never abandoned its extensive tram system, most buildings are heated with district heating, the waterfront areas offer pedestrianised recreation, and the city is full of parks and trees.

People are healthy, happy and live a long time. How do you put a price on that? It is the result of consistent spending on environment-improving technologies over a period of 40 years. Never forget that Sweden was quite a poor country as recently as the 1950s.

Gothenburg has countered the downturn in manufacturing in the west by becoming a centre for innovation in many different fields.

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