Infrastructure bill sends states sprinting toward electric buses

The bipartisan infrastructure bill that has directed billions in funding to clean energy plans has sent states scrambling to attract one of the hottest new sectors in high tech manufacturing: electric school bus makers.

Dozens of states have moved to increase the number of electric school buses in their fleets over the coming years, fueled by a provision in the law signed earlier this year by President Biden that directs $5 billion to help school districts make the switch.

That money has also sent an industry that was already one of the fastest growing in the transportation sector scrambling to meet the demand. Those manufacturers say they have to move fast to ramp up production, lest they fall behind on orders.

“You see that that demand, particularly in the school bus market, is increasing dramatically and increasing quickly. In the entire industry, we don’t today have the production levels that are necessary in electric school buses to meet the demand,” said Mark Nestlen, vice president of GreenPower Motor Company. “The industry as a whole has got to stop growing incrementally and start growing exponentially to meet the targets and meet the demands in the states.”

Nestlen spoke in a phone interview last month from the side of the road in Charleston, W.Va., where his firm had celebrated the opening of its second manufacturing facility — one that is within a day’s driving distance of most of the Eastern Seaboard.

“When you’re delivering electric school buses, you need to have your facilities in a geographic proximity to your customers,” Nestlen said. “We had to look to the East Coast for a location that was going to be able to allow us to move product up and down the eastern seaboard.”

Until now, electric bus manufacturers have largely focused on California, where emissions standards and climate goals have spurred local school districts to invest in electric buses. But the incentives packed into the infrastructure plan have made the switch to electric buses more attractive across the nation, sending the industry scrambling to build capacity and states swooning to attract new business.

“We are right now talking with a number of different electric school bus manufacturers to build manufacturing facilities in New York so that they can get prioritization when these bids go out from these school districts,” said Tim Kennedy (D), a New York state senator who represents Buffalo and chairs the Transportation committee. “We want to support jobs in the state of New York, and we want to support American jobs. So investing into a new green economy is, is imperative.”

The state budget package signed by Gov. Kathy Hochul (D) in April included a provision barring school districts from buying non-electric school buses beginning in 2027. By 2035, all 56,000 buses shuttling New York students to and from school must be electric.

Maryland Gov. Larry Hogan (R) signed a bill this year barring school districts from buying anything but zero-emission buses beginning in 2025 — with the caveat that districts can make alternative plans if there is not a sufficient number of buses on the market to purchase.

“Making the transition to zero-emission buses checks a number of boxes for Maryland — advances our environmental goals, reduces noise pollution, achieves more cost effectiveness for agencies, and leads to a more modern and reliable fleet,” Hogan told Pluribus News in an email. “There are also a number of new jobs and workforce development opportunities associated with the installation, operation, and maintenance of EV charging stations.”

In 2020, 15 states and Washington, D.C., signed a joint memorandum of understanding aimed at ensuring all medium- and heavy-duty vehicle sales are zero-emission vehicles by 2050.

“To reach our clean energy goals and beat back the effects of climate change, we must rapidly electrify our transportation system by supporting the adoption of electric vehicle use in every sector of our economy,” New Jersey Gov. Phil Murphy (D) said in a statement at the time he signed the memorandum.

Some states, such as West Virginia, see the boom in electric bus manufacturing as a path to economic diversity after decades of reliance on a coal industry that is now suffering.

“We’re an energy state. We produce a lot of it. We’re a net-exporter of energy,” said West Virginia House Speaker Roger Hanshaw (R). “For us, it’s another way to play in the energy space. We don’t just export fossil energy now in the form of coal trains. We can export fossil energy in the form of electric powered buses that are moving freight and goods and people.”

Only a tiny fraction of the approximately half a million school buses on the road today are electric. A study by the World Resources Institute, an environmental think tank, found only 302 electric buses operating in June.

But the report found at least 455 school districts have awarded contracts for more than 11,600 buses set to be delivered in the coming years. About 200 districts have put in new orders just since the infrastructure law passed.

The report underscores the industry’s growth potential — and the appeal for states that want to attract new facilities.

“The phone’s ringing a lot because the money is out there to spend,” Nestlen said. “It will in fact not only drive the demand in the market, but when you look at it from a school district position, this is one of those game-changing moments for school districts.”