China is winning the race to provide zero-emission transit. How can the U.S. close the gap?

Worlds apart: Why the U.S. can’t keep pace with China on electric and zero-emission buses
: May 2022
July 2021

Tucked inside the $1 trillion bipartisan infrastructure agreement is an additional $2.5 billion for local transit agencies to buy electric buses. That will need to be just a down payment if the United States is going to catch China in the race to power zero-emission public transit. According to a Bloomberg estimate, about 425,000 electronic buses (e-buses) are in operation worldwide today; 421,000 – more than 99 percent – are in China. 300 are in the United States. Why can’t the U.S. move as swiftly as China in building e-bus fleets?

By 2030, the City of Los Angeles will be served by an entirely electric battery-powered bus fleet. Same for New York and Chicago by 2040. These are goals that Shenzhen, China, reached years ago, taking just eight years to build a fleet of more than 16,000 e-buses.

Why are Chinese transit service providers so far ahead of U.S. transit agencies inbuilding 100 percent electric, zero-emission bus fleets?

Overwhelming government subsidies

According to the Center for Strategic and International Studies, the Chinese government has spent more than $58 billion to support R&D and to stimulate demand for battery-powered vehicles and related technologies -- considerably more than the $2.5 billion included in the bipartisan infrastructure agreement.

China will also have aggressive fuel-efficiency standards for buses and trains that go into effect in 2022.

In transit, China has been moving toward zero-emission bus fleets for more than a decade, getting a big head start on U.S. transit agencies. Beijing used 50 electric buses in 2008 to support the Summer Olympics. Only in 2019 was New York City able operate as many e-buses.  

Adding to the Chinese advantage: Lithium ion batteries require rare earth materials that are far, far more abundant in China.

Of course China is acting in haste not just to gain an upper hand in battery technology, but also out of an urgent need to improve air quality. Cities like Shenzhen and Yangzhou are adding several hundred thousand new residents a year, and providing zero-emission transit might be the only way to sustain such breakneck growth will also keeping a cloud of smog from forming over the skyline.

The product of China’s support for electric buses has been a robust manufacturing base, churning tens of thousands of zero-emission buses that are servicing cities in China and across the globe.

Building infrastructure to support electric buses

If the bipartisan infrastructure agreement is signed into law, Washington could soon be spending $39 billion on public transit and another $7.5 billion for electric vehicle charging stations. Where the two intersect -- charging stations for public buses -- will likely be defined by local planners.

China’s success in electric buses has been a story about urban planning as much as one about technology and government investment.

270 charging stations with about 5,100 charging poles have been built to power the more than 16,000 electric buses in Shenzhen (a charging pole to bus ratio of 1-to-3). An estimated 32,000 charging poles for buses have been built in Shanghai.

In other words, Chinese transit providers didn’t just purchase electric buses, they first ensured that cities had the charging infrastructure to support zero-emission bus service.

In establishing the charging infrastructure for electric buses, Chinese cities did what Philadelphia did not do (by city officials’ own admission) before expanding its own electric bus fleet, and presumably avoided cost overruns that plagued that city’s e-bus efforts when they were forced to expand bus depot charging stations.

The lesson of Chinese success (and Philadelphia’s struggles) is clear: Build an infrastructure plan, understand the full range of costs and uncertainties, and conduct a pilot project before scaling e-bus implementation.

U.S. failure to launch

As China’s charged ahead (way ahead) in building electronic bus fleets, American efforts to build e-bus fleets faced unstable policies from Washington, coupled with domestic opposition from a Koch brothers-aligned commentators and uneven results from electronic buses that have been introduced into service.

Republicans in Congress have repeatedly introduced bills to end tax credits for electric vehicles. And public campaigns against e-buses have been enflamed by recent struggles with buses provided by Chinese bus manufacturer Build Your Dreams (BYD) Ltd.

But it wasn't just GOP opposition that stymied efforts to build an American electric bus fleet.

In the Spring of 2018, the Los Angeles Times published an investigation finding that BYD had sold more than $330 million in electric-powered buses and vehicles to Southern California agencies that were woefully failing to meet performance demands.

The investigation found that BYD electric buses were “stalled on hills, required service calls much more frequently than older buses and had unpredictable driving ranges below advertised distances, which were impaired by the heat, the cold or the way drivers braked.”

LA’s struggles with BYD electric buses appeared to be shared with other cities across the United States and overseas. City officials in Albuquerque, N.M., returned 15 60-foot buses they had purchased from BYD after finding that buses could travel only 177 miles on a single charge, nearly 100 miles short of what had been promised. The city had paid more than $1.2 million for each bus.

Officials in Indianapolis were promised BYD buses that could travel 275 miles on a single charge, and during the winter months, found they had a range as short as 152 miles. Indianapolis transit officials soon after backed off a plan to purchase additional electric buses, casting doubt that they would be able to meet their own goal of a 100 percent electric fleet by 2032.

In short, political will is only a part of a necessary strategy to close the electric bus gap.

Yet even before the bipartisan infrastructure agreement was reached, there were reasons to believe that U.S. cities were moving toward something resembling parity with Chinese cities.

Economies of scale appear to be taking hold in the electric bus market. Operating costs after paying the up-front cost of purchasing an electric bus are sharply declining. A report from Bloomberg New Energy Finance and the C40 Cities Climate Leadership Group found that for electric buses operating with a 250 kWh battery systems, operating costs were at or below price parity with diesel and CNG.

With potentially billions in additional funding from Washington, the flywheel may soon spin faster.

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