BYD and Generate Capital to Launch First-Ever U.S. Partnership for an Electric Bus Leasing Program

Generate Capital Inc. announced July 10, a joint venture to launch an electric bus leasing program in the United States in partnership with BYD Motors Inc. About $200 million will be allocated to this pioneering lease program, which will help public and private sector clients accelerate adoption of battery-powered electric buses by reducing upfront costs. In doing so, the program will also help provide cleaner, quieter, safer, and more fiscally responsible transportation choices.

According to Bloomberg New Energy Finance, the U.S. energy efficient transportation market is expected to grow 500 percent over the next eight years. Today, there are approximately 345,000 electric buses on the road globally (according to the 2017 Global EV Outlook), yet the U.S. battery-electric bus stock stands at only about 300 (two-thirds of which were made by BYD). While electric buses save substantial money over the life of the asset, they do require higher upfront investment than conventional diesel-powered buses. This factor has limited the adoption of electric bus technology in the United States — particularly among private-sector clients and smaller municipalities where such start-up costs can be daunting. The Generate-BYD partnership aims to provide these entities with the same access to clean transportation options that larger municipalities use to save substantial money. For instance, BYD client Antelope Valley Transit Authority (AVTA) in Los Angeles County estimated a cost savings of more than $46 million over the lifetime of a new fleet by electrifying its buses; this equates to approximately $46,000 per bus per year in savings compared to an all diesel fleet. In addition, AVTA estimated that noise pollution would be reduced by 50 percent and that the all-electric fleet would provide elimination of CO2, NOx, PM10 and PM2.5, improving air quality. AVTA will become the nation’s first 100% electric bus fleet by the end of 2018.

“We founded Generate Capital to bring precisely this type of proven solution to the world,” said Scott Jacobs, Generate Capital’s CEO and co-founder. “Electric buses produce almost no greenhouse gas emissions; they’re cheaper to operate than diesel buses; have lower maintenance costs; and they’re quieter and more pleasant for the rider. Traditional leasing companies typically don’t value any residual in electric vehicles, which makes financing difficult. Programs like these are an all-around win for project developers, customers, and for the environment.”

This innovative lease program already has several clients, including prominent universities, top corporations and smaller municipalities. According to the U.S. Department of Transportation, every zero-emission bus eliminates approximately 1,690 tons of CO2 over a 12-year period. This is equivalent to taking 27 cars off the road. These buses also eliminate approximately 10 tons of nitrogen oxide, and 350 pounds of diesel particulate matter.

BYD President Stella Li stated that, “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. This partnership will be critical in that effort by creating new financing alternatives to a broader range of clients.”

Generate Capital is consistently on the frontier of energy infrastructure financing and recently announced a $200 million raise led by the Alaska Permanent Fund Corporation, America’s largest sovereign wealth fund. In 2017, Generate introduced one of the market’s first solar-plus-storage deployments as part of a program with Sharp Electronics Corporation. Other recent projects include community solar assets in Minnesota, energy-efficient battery storage rollouts across the U.S., and waste-to-energy facilities in the Midwest and Northeastern U.S.

“Similar to solar in 2003, Generate is demonstrating that applying a proven project finance model to other mature industries – like transportation – has a tremendous impact,” said Jigar Shah, president and co-founder of Generate Capital. “We’re excited to lead the way with partners like BYD and to show how industry obstacles can be overcome to realize the market’s full potential.”