Prices, policies slow the transition to electric school buses

Electric school buses emit close to no greenhouse gases, preserve children from harmful exposure to diesel exhaust and make no noise. Yet, there are still very few of them on our roads. What stalls them?

The Lion Electric Co., an electric school bus manufacturer based in Saint-Jérôme, Que., launched its first electric school bus, the LionC, in 2015. Since then, it has sold about 100 of them in Canada. Why not more? “Price remains the main obstacle,” claims Benoit Morin, vice-president of sales. The price tag for an electric school bus can exceed $300,000, close to three times that of a diesel bus.

Incentives are scarce

Around 85 percent of electric school buses run in Quebec, where it represents about 1 percent of the fleet. Most of the others are in Ontario. These two provinces have or had subsidy programs to help operators acquire electric school buses. The Electric School Bus Pilot program in Ontario, which offered up to $400,000 for each new bus and related charging infrastructure, has been cancelled by the new provincial government.

“Diesel buses pollute more, are hazardous to children’s health and are manufactured in the U.S., whereas electric school buses pollute less, protect children’s health and create jobs here”

Daniel Breton, director, transport electrification, Marcon

Voyago operates one electric school bus in Ontario, acquired last June with funding from ESB Pilot. Their parent company Transdev Canada operates three more in Quebec. “Based on our experience, we can suggest that the economical balance is not in favour of electrification without incentives to offset upfront cost of purchase,” says Chuck Archer, vice-president marketing and communications.

In Quebec, the level of subsidy recently fell from $125,000 to $105,000. “The program helped with early adopters, who really wanted electric school buses, but the second wave of buyers needs stronger incentives, so we were hoping they would raise the subsidy to $150,000, but they lowered it instead,” laments Lion’s Morin.

Lion buses
Photo: The Lion Electric Co.

Lion, which has also sold about 50 electric school buses in the U.S., has been running its own subsidy program. It added a $45,000 rebate on top of the $105,000 provincial subsidy. It sold 60 buses that way in 2018, which in its eyes shows that this level of subsidy works. After purchase, operating an electric bus costs up to 60% less than a diesel one, according to a recent report from Equiterre, a Montreal nonprofit that promotes ecologically based policies and is an advocate for school-bus electrification.

Policies in the way

There are other roadblocks, such as contract models between operators and school boards. “When you have a more capital-intensive upfront cost such as an electric bus, a longer contract model could help companies capitalize the investments over longer periods of time,” suggests Voyago’s Archer. The Quebec government recently raised the maximum authorized duration of a contract from five to eight years, but for all types of buses, diesel included. That erased any kind of advantage the change could have given electric buses.

Watch how Lion supplied the largest electric school bus fleet in the United States.

And there’s more. “Quebec subsidizes the cost of diesel used by school buses, when it goes above 60 cents a litre,” explains Daniel Breton, director, transport electrification at Marcon, who was Quebec’s Environment Minister in 2012. With the price of diesel hovering at around $1.20 per litre, Breton estimates that the Quebec government will pay $400 million over the next 12 years for the fleet of 8,000 diesel buses.

“That’s nuts,” he argues. “Diesel buses pollute more, are hazardous to children’s health and are manufactured in the U.S., whereas electric school buses pollute less, protect children’s health and create jobs [here], since they are built in Quebec. So why choose to support diesel instead of electric?”

Political will needed

Jessie Pelchat, author of Equiterre’s report on this issue, claims that school buses are the ideal vehicles to go electric. “Their daily journey is well known and doesn’t vary much, so autonomy is not a problem, and they can be recharged outside of peak hours of electricity consumption,” she notes.

Pelchat adds that converting all school buses in Quebec alone would save $1 million in healthcare spending. It would reduce by $67 million Quebec’s annual oil imports and increase Hydro-Quebec’s annual sales by up to $17 million. That, plus the acquisition of buses made in Quebec, would improve Quebec’s trade balance sheet by $50-$100 million. And that’s just one province.

“The arguments are there, what we need now is political will,” concludes Pelchat.

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