Procurement Strategies for Reducing Capital Costs of Zero-Emission Buses

One of the challenges to deployment and commercialization of zero-emission buses is the high capital cost of the vehicles relative to vehicles powered using conventional technologies. A strategy for reducing these costs is to increase sales volume, which has been successfully driven through funding opportunities like the Federal Transit Administration’s Low or No Emission Vehicle Program. Another strategy for increasing sales volume is to combine vehicle purchases from multiple transit agencies through a joint procurement. There have been extensive exercises in Europe to decrease the cost of fuel cell electric buses using a joint procurement strategy, with some level of success. This paper explores the current landscape for procuring zero-emission buses and evaluates whether a joint procurement strategy could be an effective way to decrease vehicle costs in the North American market.