Electric buses
Electric buses

Electric buses

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Meet our investment in this space: Ember

TL;DR

  • We must reduce the world’s dependence on cars to meet climate targets.
  • Buses use already-established transportation infrastructure while offering accessibility, comfort, and flexibility.
  • Electric buses are the lowest emitting type of bus, and so they are the best option to reduce transportation emissions drastically. They will put electric mobility into the hands of a larger percentage of the population than electric cars.

The problem: Passenger transportation

The transportation sector is responsible for around one-fifth of global CO2 emissions (over 8 billion tonnes annually), and more than half of that comes from moving people from place to place. Per passenger-km, short-distance flights are definitely the worst offender when it comes to CO2 emissions (especially for short-duration flights), but when it comes to reducing overall emissions from transportation, it is clear that the best path forward is to move people away from car trips.

People are driving more than ever before. The average car contributes 4.6 tonnes of CO2 annually, which adds up to around 3 billion tonnes of CO2 each year, up from 2.2 billion tonnes in 2000.

  • Some governments are banning short domestic flights in favour of more environmentally responsible travel methods. France, for instance, is banning flights under 2 hours, and Austrian airline covid-bailouts included a provision to cut routes that could be replaced by trains.
Source:
Source: Visual Capitalist, Feb 2022

Beyond emissions, there are also health concerns associated with our increasing reliance on fossil fuel-powered vehicles. Exhaust fumes are a top source of pollutants like carbon monoxide, nitrous oxide, ozone, and soot.

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According to the World Health Organization, outdoor air pollution kills 4.2 million people annually.

Public transportation options that carry many passengers are much better for the climate than personal vehicles, even electrified ones. Still, in the EU, about 10x more passenger travel is done by car than by train, and 87% of all travel in the US is by car or light truck. The fact is, we have built our lives around cars, and we need a better way to move people around.

Source:
Source: EU Mobility Atlas 2021
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Expanding public transportation and reducing our dependence on personal vehicles is the only way to ensure the decarbonization of transportation.

The solution: Electric buses

Not everyone can afford a personal electric vehicle, and even if they could, the resource demands of switching the world’s cars over to electric motors are currently out of grasp (certainly in a sustainable and just way). If demand for EVs continues as projected, the US market alone would require three times the current global production of lithium by 2050. And while there is theoretically enough lithium on Earth to meet those demands, getting to it and extracting it sustainably is another story.

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Lithium: Demand for lithium is expected to rise by over 40x by 2040, and the world is facing a lithium shortage by 2025 if production does not increase. Not because of a shortage in the natural supply of lithium but because we will face difficulties extracting what is there. Extracting lithium requires a lot of water, and more than half of lithium production is in water-stressed regions.

The battery for one electric bus requires about 44 kg of lithium. If you figure that one bus sits about 40 people, let’s look at the amount of lithium required for each of those 40 people to have their own personal EV:

Vehicle type
Li required
x 40
Midsize EV
8 kg
320 kg
EV SUV
24 kg
960 kg

E-buses put electrification into the hands of a larger portion of the population. It takes almost 22x more lithium to build 40 electric SUVs than one bus that can move 40 people. Instead of those 40 SUVs, 960 kg of lithium could be used to build 22 electric buses that can move 880 people.

With a serious global push for net-zero emissions, 99% of buses could be electric by 2040, but at least 83% likely will be.

Source:
Source: BloombergNEF Electric Vehicle Outlook 2021

Conventional diesel buses always emit the most CO2 per km travelled of all bus types. When the electricity supply is green (< 200 g CO2/kWh), fully electric buses emit the least CO2 per person over distance versus other types of buses, including various hybrid electric and bio-oil technologies.

*(P)HEV = (plug-in) hybrid electric vehicle; HVO = hydrogenated vegetable oil

The range of electric buses depends on battery size and driving conditions but is currently around 300-350 km. In 2021, a MAN e-bus trial in Germany went 550 km in 24 hours, and a TRAXX motorcoach went 261 km over hilly terrain in Canada. Ember, an electric bus service in the UK and a Pale blue dot portfolio company, travels 270 km in between charges and its fast charging infrastructure allows each Ember bus to travel up to 1000 km per day.

Transitioning a fleet over to electric

While the upfront cost of a new electric bus is higher than a new diesel, the long-term operating costs can be lower. Electric buses have fewer moving parts, so less maintenance is involved, and the costs are between 20% to 60% less per mile than diesel. Midlife overhaul (i.e. engine or battery replacement) can be up to 50% more in electric buses, but the price of lithium batteries fell 89% between 2010 and 2020 and will likely continue to decrease.

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Because batteries have second-life uses, i.e. as energy storage, and can be recycled, they make a better long-term investment than new diesel engines.

The market

In 2013, Germany opened up its long-distance bus market to private operators and saw a surge in travellers using this option in the years that followed. By 2015, 23.2 million passengers were travelling by long-distance buses, compared to just 2.5 million in 2012.

Demand for sustainable travel options is increasing. In a survey of 29,000 travellers in 2021, 61% said they wanted to travel more sustainably, and 49% thought there were not enough sustainable travel options available.

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The ‘slow travel’ movement encourages people to go off the beaten path and forego air travel for more sustainable options like trains and buses.

In the UK, the average person takes 757 trips each year, and more than half (448) of those are by car. Electric buses have the potential to replace more than 200 of those trips.

Source:
Source: UK National Travel Survey

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Last updated: March 2023