Electric Autonomy sits down with NFI Group’s president and CEO  to understand what the company is doing to thrive in a tough and fluid marketplace

Many companies are having mixed experiences in Canada’s EV ecosystem lately, but (at least from the outside) Winnipeg-based New Flyer Industries doesn’t seem to be one of them.

To industry spectators, New Flyer — a leading provider of electric, natural gas, hybrid and clean diesel transit buses in North America under the parent company NFI Group’s umbrella — appears to be jumping effortlessly from strength to strength, regularly announcing funding and supply deals across three continents.

With more than 9,000 employees in 10 countries, NFI Group’s brands include New Flyer, Motor Coach Industries (based in Illinois), Alexander Dennis Ltd. (UK-based manufacturer of ZEV single- and double-deck buses), Plaxton (diesel motor coaches built in the UK), ARBOC (low-floor cutaway and medium-duty buses, headquartered in Indiana), and NFI Parts, a key facet of the overall business on the service side, given that NFI Group has more than 100,000 buses and coaches in service around the world.

Sitting down for an exclusive interview with Electric Autonomy, NFI Group’s president and CEO, Paul Soubry, reflects on the company’s journey and its forward-thinking mindset.

“We coined this expression: “the Zevolution,” says Soubry. “It’s not a revolution, it’s an evolution. [Zero-emission] doesn’t happen overnight.”

In a wide-ranging interview, Soubry tells Electric Autonomy about New Flyer’s journey to navigate a capital-intensive, highly competitive and sometimes speculative global EV marketplace.

“Battery technology today compared to four years ago — or even eight years ago — is moving at light speed,” Soubry explains.

“It’s one of those games where you can’t stop playing.”

The eve of Canadian production

Surveying NFI’s business today, Soubry reflects on the milestone the company is poised to hit.

Last month, its North American New Flyer division announced it is expanding its manufacturing capabilities at its Winnipeg facility, to include end-to-end manufacturing in Canada.

Previously, the company manufactured bus shells in Winnipeg before completing assembly at its facility in Crookston, MN. This was done to satisfy stringent Buy America rules but posed challenges to its Canadian operations.

“The Buy America rules require us to do certain things and spend certain money in the United States. Our ability to grow our Canadian customer business was limited,” says Soubry.

But now, that’s about to change.

The first fully Canadian-built electric bus from New Flyer is set to roll out next year. By 2027, when the facility is fully completed, production will ramp up to a capacity of 240 buses produced annually. It is also increasing its lineup of zero-emission buses.

The composition of the buses has yet to be determined, but Soubry says there will be a variety of power trains.

A key part of New Flyer’s business is actively supporting and servicing more than 35,000 heavy-duty transit buses (New Flyer, NABI, and Orion) currently in service in North America. Of these, 8,600 are powered by electric motors and battery propulsion; fully 1,900 are zero-emission.

If New Flyer has learned one thing over the last five years it’s that diversification is key.

Tough times

To expand full production to Canada, New Flyer is receiving a total of $25 million from the Manitoba and federal government.

It’s a welcome influx of cash after some hard years.

Like many manufacturers, NFI Group faced what Soubry describes as a “brutal” time during the COVID pandemic and ensuing supply chain challenges.

The pandemic led to major financial losses and job cuts for the New Flyer division.

“We went into quite serious financial distress,” recalls Soubry. “We had to renegotiate our credit lines, take on even more debt, we issued some equity and so forth.

However, being part of NFI Group, New Flyer’s Manitoba-based global parent company, provided some stability. It gave New Flyer access to capital, allowing them to navigate through those tough times — a luxury that other smaller bus manufacturers didn’t have, notes Soubry.

“While it was absolute hell from 2020 to even today, to some extent,” says Soubry. “We’ve come a long way in converting our business back to being able to operate a profitable business, where we have gone from losing a bunch of money to breaking even today. And we have an exciting order book.”

Currently, NFI Group has $12 billion in backlog orders—equivalent to about 14,000 vehicles.

About 25 per cent of all deliveries across the NFI Group are zero-emission buses. For New Flyer specifically, zero-emission buses account for roughly 42 per cent of backlog orders, reflecting a strong upward trend in demand.

Secret to success

As demand for zero-emission buses surges, the pool of manufacturers able to meet that demand is shrinking significantly.

“I look at my clients today,” says Soubry, “Take New York City [for example], an RFP put on the street two or three years ago would have had three or four bidders, maybe five. Today, they got maybe one or two.”

The dwindling list of manufacturers is causing concern among buyers. “Clients are very nervous that the industry has shaken out a lot of the competition,” explains Soubry. “They need more competition, not only for price competitiveness but for [advancing] technology.”

New Flyer is surviving the turbulence by taking a flexible and agnostic approach to bus propulsion systems.

Instead of offering one propulsion system, New Flyer built a versatile platform that can host a range of different options — from battery-electric and hydrogen fuel cells to diesel.

This flexibility allows customers to transition to zero-emission buses at their own pace, based on their unique needs and circumstances.

Soubry acknowledges that this strategy introduces complexity, additional costs, and operational challenges, but he remains confident that it’s the right long-term approach.

“What we’re seeing now is [transit agencies] want to try different propulsions to understand what works best in their environment,” says Soubry.

“We can offer them those choices.”

Flexible operations and offering choice

Another strategic decision for New Flyer is its integrated production line.

“If you came to our factory, you’d see a diesel bus, then a fuel cell bus, and then a battery-electric bus, all going down the same line,” Soubry explains.

While this approach creates some labour inefficiencies — since installing a battery pack takes more time than installing a diesel engine, for example — it gives New Flyer the flexibility it’s seeking.

“If the adoption rate [for battery-electric buses] goes faster, we’ll just turn it up faster. If it stays slower and goes to diesel or natural gas, we can do that,” he says.

“We’re trying to make our people multi-skilled to handle multiple technologies. It’s an evolution, not a revolution; it’s going to take 20 years to convert entire fleets, if not more.”

A competitive edge

New Flyer’s ability to weather industry challenges is not solely due to its production capabilities. Its robust spare parts and service business has also played a crucial role in the company’s resilience.

“When people weren’t buying new buses, we were getting spare parts revenue and service revenue,” says Soubry.

Additionally, as part of the larger NFI Group, New Flyer benefits from the brain trust of a global bus manufacturer with a diverse portfolio of transit offerings. This allows New Flyer to leverage insights from markets around the world and apply them to its own operations, says Soubry.

“Not all [parts of the business] are going to fire on all cylinders at the same time,” Soubry explains. “But the portfolio play allows us to manage our way through good times and bad across the businesses.”

Innovation and autonomy

Looking to the future, New Flyer is exploring autonomous vehicle technology. Soubry is anticipating major growth in this area.

While legal and regulatory challenges in North America are slowing the progress of self-driving buses, Soubry points to the NFI Group’s UK-based brand, Alexander Dennis, which already has autonomous buses with Level 4 capabilities on the road in England.

“[There are] great learnings going on over there that we can apply elsewhere,” says Soubry, adding that New Flyer is testing some autonomous features on its buses on dedicated transit roads in Canada.

“You’re not going to see an autonomous bus on the road tomorrow, but that technology is coming,” says Soubry.

“We’ve got to be aware, we’ve got to be in the game, we’ve got to learn, so, when the time is right, we will be ready to execute.”