China Gives Diesel Buses the Boot in Favor of Electric

David Fessler By David Fessler
Energy and Infrastructure Strategist

Alternative Energy

In my previous life as vice president of a large electronic test equipment manufacturer, I made numerous trips to Asia to visit customers. One of the dirtiest cities back in the early 1990s was Bangkok.

Cars there still used leaded gas, and the buses and trucks belched filthy black diesel smoke. Air pollution was out of control.

It was so bad that the housekeeper insisted on wiping off the porch before I set foot on it. I thought that was overkill until I saw the rag she used. It was covered in black soot.

It’s no wonder I came back from each trip with a bad sinus infection.

Fast-forward to 2018: Bangkok is much cleaner, as are a lot of other major cities.

Shenzhen, China is the perfect example. And it’s much cleaner for one reason…

It got rid of all of its diesel-belching buses.

A Boost for Electric Buses

Back in 2010, Shenzhen’s buses belched out 20% of the city’s air pollution.

But over a period of six years, the city replaced all of its diesel-powered buses with electric ones.

All 16,359 of them…

The city now boasts the largest fleet of battery electric buses (BEBs) in the world.

Make no mistake, however: BEBs are $100,000 to $300,000 more expensive than standard diesel buses are right now.

When city planners look at the upfront cost of a diesel bus compared to that of a BEB, diesel wins every time…

At least for now.

But by 2030, the price of BEBs could be at or below upfront costs for diesel buses.

That’s due to the continual drop in the cost of lithium-ion battery packs. Current battery pack prices are hovering around $200 per kilowatt-hour.

By 2030, they could be in the $70 per kilowatt-hour range.

Additionally, BEB manufacturers have been successful in cities where planners look at the total cost of ownership versus the upfront cost. When total cost of ownership for a diesel bus is compared with that of a BEB, electric wins out.

That’s because BEBs have much lower maintenance costs than diesel buses do. And over the life of a bus, those savings really add up.

From Black Smoke to Blue Skies

Even though China currently has 99% of the world’s 385,000 BEBs, there are a lot more coming.

Every five weeks, another 9,500 BEBs are added to bus fleets in China.

That’s more than London’s entire bus fleet. Every five weeks.

The potential of all these new BEBs to clear the air is enormous. Diesel smoke contributes to 6.5 million deaths per year. BEBs can eliminate 20% or more of that pollution.

That makes diesel buses great candidates for electrification.

Between the dropping prices and the huge amount of pollution that diesel emits, it’s a no-brainer for China to replace all of its buses with electric versions.

A decade from now, no city will want to buy a diesel-belching bus.

And city dwellers will all breathe a lot easier.

Good investing,

Dave