Charging Ahead: The Growth of Electric Bus Markets in Latin American Cities
Public transportation plays a major role in Latin American cities. Cities are also the most likely regions to be the most polluted due to their high population densities. Electric buses present a great opportunity to both provide a convenient mode of urban transportation, and a transportation mode that increases air quality while decreasing city congestion. But the upfront cost of electric buses is much higher, about 1.5 times that of a conventional bus. Three cities in Latin America have led the way in developing new financing and business models to incentivize electric buses: Santiago, São Paulo, and Campinas.
In Santiago, Chile, new contractual procedures have been designed to adopt electric buses. Under the new contracts, bus providers are compensated based on the number of people transported rather than the number of miles travelled, which is the current system. Also, service contracts are awarded separately from bus procurement. This allowed the Santiago government to sign a new contract with an electricity company, and an electric bus manufacturer to provide the buses, while using local resources for bus maintenance. Santiago’s pilot projects have demonstrated directly to city officials the benefit such as low operational costs for electric buses, which makes it more economical.
In Brazil both São Paulo and Campinas have shown strong advances in electric bus adoption. In Brazil, buses are owned privately and contracted with the city to provide services. Beginning in 2009, São Paulo began shifting their bus fleet of 16,000 buses to electric. São Paulo first conducted analysis of the bus routes that would be covered with current technology and then held pilot projects sponsored by manufacturers to test the technology while marketing them to their contractors. Finally, São Paulo began requiring that, when a new service contract is signed, the contractor must have a feasible roadmap for transitioning to 100% electric buses within the next 20 years. Campinas, which lies about 140 miles west of São Paulo, is a mid-sized city of 3.7 million people. Within Campinas, is also one of the country’s first electric bus factories that has provided low-cost pilot buses for demonstration to the city. Campinas is spurring more electric bus adoption by mandating certain zones of the city to be run by electric buses only. Campinas is also working with the local university to develop research from their pilot projects so that the city is a living laboratory for electric mobility.
Lessons Learned from these three cities include:
- Establishing partnerships with vendors to provide comprehensive solutions. Unlike personally owned EVs, electric bus infrastructure can be easily implemented in the right locations in coordination with city planning. Successful programs were those that were partnered with bus manufacturers to plan the charging network, and local banks to establish low risk financing.
- Conducting pilot programs early with well-trained operators. These pilot programs were then showed directly to policymakers that could see the advantages of the technology and gained trust for the program through transparency and stakeholder input.
- Incentivizing local manufacturing. In Campinas, additional manufacturing was built to service and research electric buses. This further increased the economic value of this program by providing jobs to the local community.