With Chinese new energy company BYD leading the charge on pure electric buses, it’s fitting that it would also make headway on making the vehicles affordable for regional transportation systems.
BYD has created a joint venture with San Francisco-based energy and resource infrastructure financing firm Generate Capital to provide an electric bus leasing program in the United States.
Generate Capital will allocate $200 million to the lease program.
Regional transportation systems, which often struggle with affording capital expenditures, will now have greatly reduced upfront costs.
While electric buses are cheaper to run over the long term, they do have higher upfront investment than conventional diesel-powered buses.
The market for electric buses is expanding rapidly, as regional transportation systems replace diesel buses. Many hybrid buses have also been on the road for over a decade, and are heading towards the end of their service life.
According to Bloomberg New Energy Finance, the U.S. energy efficient transportation market is projected to increase 500% over the next eight years.
“BYD’s mission is to fundamentally change the world by reducing our dependency on carbon-based fuels through the development and advancement of battery and electric vehicle technology,” said BYD president Stella Li. “This partnership will be critical in that effort by creating new financing alternatives to a broader range of clients.”
BYD and Berkshire Hathaway
In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value almost ten-fold, and is now worth roughly $1.96 billion.
For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.
© 2018 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.