Maryland Suburb Places Largest Electric School Bus Order of its Kind in US

Earlier this week, we explored why fleet electrification – specifically buses, vans, trucks, and other commercially- or municipally-owned vehicles – could be a gamechanger for lower-carbon transportation. Not only would it mean replacing some of the most heavily polluting vehicles first, but it also means focusing on vehicle miles that are harder to substitute through other means, such as bikes, walkability, or telepresence. (Fleet vehicles also often have very predictable routes and range demands, and centralized depots where fast charging is possible.)

There can be few better examples of this principle than school buses. First up, they are often massively inefficient. Secondly, they contribute directly and significantly to air pollution – and they do so in locations where it does the most damage to hearts, lungs and minds. As Matt Hickman has noted in the past, the fact that young people are particularly susceptible to exhaust fumes provides additional impetus for making a change.

That’s why it’s good news that a school district in a Maryland suburb has just placed the country’s largest electric school bus order of its kind to date. Specifically, the Montgomery County Board of Education approved a $1,312,500 four-year contract to replace some 326 of its 1,422 buses with electric models over the next four years. 

Who Is Paying for the Buses?

Under the terms of the contract, the vendor – which is a subsidiary of Highland Electric Transportation – will pay for all of the upfront costs of the buses, with the plan to recoup that investment over time through decreasing vehicle prices, less expensive fuel, and maintenance savings. According to a press release from Montgomery County Public Schools (MCPS), the cost to the school system includes use of the bus, all charging infrastructure, charge management, electricity, and maintenance reimbursement.

The buses themselves will be built by Thomas Built Buses, which interestingly enough appears to be hedging its bets on its own website – promoting both electric school buses, and also content about why diesel is not as dirty as treehuggers like us would have you believe.

Either way, MCPS certainly seems to think the move makes sense. Over the lifetime of the initiative, they project the district will end up spending $168,684,990 – a figure that is comparable to the cost of purchasing, operating, and maintaining diesel school buses. In a phone call with Treehugger, Todd Watkins, MCPS Transportation Director, explained that the deal is cost-competitive from day one:

“From what we’ve seen, we believe that this is the first contract of its kind that is not reliant on grant funding. Highland Electric have developed a financial model for us that recognizes savings from not using diesel buses, that will instead be used to fund the electrification of our fleet.”

He added that the economic calculus should only continue getting better as manufacturers achieve greater economies of scale: 

“Highland is going to cover the upfront cost, and because the fuel and maintenance costs are less than diesel – and because electric vehicle prices will be coming down over time as battery costs come down and production goes up – we anticipate actually saving money by year six or seven. If grant money comes in, which it might, then we have a revenue sharing deal with Highland that will mean earlier direct savings for us and the ability for Highland to offer us even better prices in the future.”

 While the size of the deal is notable in itself, Watkins says that it’s the fact that it is entirely independent from any grant funding that really makes this story newsworthy. It was also one of the main motivators for why the district was willing to be so ambitious in terms of its commitment:

“I had previously been hesitant on electrification, mostly because I didn’t want us to make commitments that we couldn’t later keep if grant funding dried up. But the fact that we can do this regardless of whether or not external money becomes available, means it’s something we know we can sustain for the long-term.”

This is one more data point that suggests we are reaching a significant tipping point where – as costs start to fall – we may see a growing number of vendors willing to help schools and other organizations manage the significant upfront costs of electrification by leasing electric buses, and then recouping that money over time. After all, one of the benefits of fleet electrification for municipalities and businesses alike is the relative predictability of charging, maintenance, and operations costs. Protecting the lungs and brains of schoolchildren may end up just being welcome icing on the cake.