Electric school buses give kids a cleaner, but costlier, ride

BEVERLY, Mass. — It’s a gray November morning, and we’re on board a long, yellow school bus.

The bus bounces over this Boston suburb’s patched streets in a way that would be familiar to anyone who ever rode a bus to class. But the bus is quiet – and not just because there are no kids on board.

This school bus is electric.

Right now, only a tiny fraction of the roughly 480,000 school buses in America are battery-powered. Most still use gasoline or diesel engines, just as they have for decades. But thanks to fast-maturing electric-vehicle technology – and the new incentives available under the Bipartisan Infrastructure Law and the Inflation Reduction Act – electric school buses are set to become much more common over the next decade.

“It’s like a big huge go-kart,” said the bus driver on that November day, who’s been driving school buses, mostly gas-powered, for over three decades. “When you accelerate, you move. When you stop accelerating, you stop. And you don’t hear any sound.”

“Driving a diesel bus is not like driving a go-kart,” she said.

Environmental activists have been working for years to try to replace diesel and gasoline school buses with new electric models. Until recently, they faced some big challenges: Only a couple of companies made fully electric school buses, prices were very high, and the need for new “refueling” and maintenance infrastructure to replace tried-and-true diesel proved too daunting for many school officials.

That’s starting to change. Over the last couple of years, more companies — including long-established school-bus manufacturers — have begun making electric school buses, government subsidies have increased, and regulators and nonprofits have worked to educate school districts, utilities and the general public about the advantages.

But this isn’t like selling electric vehicles to drivers. School districts have to navigate a confusing array of subsidies and restrictions — and deal with the awkward fact that right now, a new EV bus costs a lot more than a traditional diesel-powered bus (in fact, three to four times as much).

It’s hard to make a battery-electric version of a long-haul truck, like EV startup Nikola is working on, as the batteries required to deliver the distance weigh a lot and take hours to recharge.

But the case for a school bus — which needs only limited range of mileage, and has plenty of idle time to recharge — is much simpler. And the advantages to the traditional buses are clear.

Not only do electric school buses, or ESBs, help the environment — by not expelling diesel fumes or other emissions —they’re also better for the children they carry, particularly those suffering from chronic respiratory conditions such as asthma.

Like other electric vehicles, ESBs are also likely to have lower maintenance costs over time than their internal-combustion counterparts.

Plus, the buses’ large batteries can store and deliver energy to power buildings and other devices, whether temporarily in an emergency or as part of a larger renewable-energy strategy.

All of those advantages come with a price tag, however.

ESBs are expensive: Battery-electric versions of small “Type A” school buses cost roughly $250,000, versus $50,000 to $65,000 for diesel; full-size “Type C” or “Type D” buses can range from $320,000 to $440,000 in electric form, versus about $100,000 for diesel.  

“They’re much better, and their savings are much greater once you actually get them into the depot,” Sue Gander, a former U.S. Environmental Protection Agency official, told CNBC in a recent interview. “But the upfront is such that, without [government] incentives, you can’t break even [in comparison to diesel buses].”

Gander leads the World Resources Institute’s Electric School Bus Initiative, a project funded in part by the Bezos Earth Fund established by Amazon’s founder, Jeff Bezos. The initiative works with school officials, utility companies and ESB manufacturers to try to accelerate the adoption of zero-emission school buses.

“We think for the next three or four years, as costs come down, as scale goes up, we’ll need to have those incentives in place to make the numbers work,” she said.

And like other electric vehicles, ESBs will require new infrastructure: At minimum, a school district or bus operator will need to install chargers and retrain their mechanics to service the new buses’ battery-electric drivetrains and control systems.

For small school districts, and those in low-income areas, the costs and challenges can be daunting.

Duncan McIntyre is trying to make it easy, or at least easier, for school districts to go electric. After years in the solar-energy business, he founded a company, Highland Fleets, that aims to make the switch to electric buses simple and affordable for school districts and local governments around the country.

“You’ve got more expensive equipment, but it operates much cheaper,” he said, noting that — as with other EVs — the costs of charging and maintaining an electric school bus are considerably lower than with gas or diesel buses.

The last piece, he says, “which everyone overlooks, is that those bus batteries can send power back to the grid to meet peak demand. And that’s an energy market’s opportunity to create additional revenue.”

The Bipartisan Infrastructure Law passed late last year includes $5 billion in subsides for low- and zero-emission school buses over the next five years.

The EPA, charged with administering those subsidies, said in September about 2,000 U.S. school districts had already applied for the subsidies, with over 90% of those applications requesting electric buses. (The remainder were seeking subsidies for low-emissions buses powered by propane or compressed natural gas, the agency said.)

Not all of those applications, which combined amount to nearly $4 billion in subsidies, will be approved immediately. The EPA awarded about $1 billion in funds in October, giving priority to low-income, rural, and tribal communities. It expects to distribute another $1 billion in 2023.

California offers state-level subsidies, through its Air Resources Board, of up to $235,000 per bus, plus an additional $30,000 per bus for charging equipment. The agency set aside $122 million for the program this year.

Colorado has made available $65 million in funding for a similar program. And New York, Connecticut, Maryland and Maine all moved to set up similar programs this year, with New York the first to target a 100% electric school bus fleet by 2035.

The money is helpful, but Gander said school districts still need to think through all of the aspects of going electric.

“It’s really about supporting school districts, helping them understand where do electric buses fit into my fleet at the moment? And how do I plan for continuing to add them in to my fleet as I go along?” Gander said. “How do I develop the infrastructure? How do I access the funding and financing that’s out there? And how do I involve the community in this process?”