Clean energy financing company Generate Capital has formed a joint venture with Chinese electric vehicle manufacturer BYD that will help BYD lease its electric buses to corporate and governmental customers in the U.S.
As part of the venture, Generate is investing $200 million to buy and lease the buses. The company, co-founded by Jigar Shah, says it expects the partnership to speed the adoption of battery-powered buses in the U.S. by cutting the relatively large upfront costs compared to fossil fuel buses and by helping customers navigate state and local incentives.
The BYD/Generate venture has already financed 24 buses in California, Colorado and New Mexico, and Generate’s goal is to expand EV bus adoption nationally, Bloomberg reports. Mandates for electric buses are being adopted in U.S. cities including New York, Chicago, Los Angeles and San Francisco.
There’s a ways to go though: there were 386,000 electric buses in use worldwide last year, Bloomberg says. Just 350 of those were on U.S. streets.
EV bus adoption presents a major opportunity for investors, as the number of electric buses is expected to triple to about 1.2 million in 2025. At that point, half of the municipal buses on the road worldwide will be electric, according to recent figures from Bloomberg New Energy Finance.
China is expected to continue to dominate the global market due to strong governmental support; Beijing has set aggressive goals for EV bus adoption, as it sees them as a key way to combat air pollution.
In fact, by 2025, China will account for 99% of the world’s battery-powered buses, BNEF says.
And the city of Shenzhen in southern China said that all of its its 16,359 buses went electric in 2017, making it the world’s first 100% electrified bus fleet. BYD is the main supplier of electric buses to Shenzhen, which has a population of about 12 million.