www.TransformingTransportation.org

Financing Sustainable Mobility:

Business models for Low and zero

emissions bus fleets

Benoit Lefevre, Director Energy, Climate & Finance, WRI Ross Center

for Sustainable Cities

Presented at Transforming Transportation 2017

TRANSFORMING TRANSPORTATION 2017, THURSDAY 12TH JANUARY

FINANCING SUSTAINABLE MOBILITY:

BUSINESS MODELS FOR LOW AND

ZERO EMISSIONS BUS FLEETS

Benoit Lefevre, PhD.Director Energy, Climate & Finance, WRI Ross Center for Sustainable Citiesblefevre@wri.org

LOW AND ZERO EMISSIONS BUSES ARE ALREADY A

REALITY AROUND THE WORLD

MAIN BARRIERS FOR IMPLEMENTATION

More expensivevehicles and

infrastructure

Lack of knowledge and fear of change

Perceivedtechnology risk

Seattle: Hybrid-electric, Opportunity charging

Foothill: Battery electric

Toronto: Hybrid-electric

Philadelphia: Hybrid-electric

Bogota: Hybrid-electric

Curitiba: Hybrid-electric

Auckland: Hybrid-electric, Battery electric

Tianjin: Battery Electric

Zhuhai: Battery Electric

Shenzhen: Battery Electric

Nanjing: Battery Electric

Gumi: Opportunity Charging

Berlin: Opportunity Charging

Turin: Opportunity Charging

Colombo: Hybrid electric, Battery electric

Singapore: Hybrid electric, Battery electric

London: Hybrid electric, Battery electric

Paris: Hybrid electric, Battery electric

Gothenburg: Hybrid electric, Battery electric Stockholm: Hybrid electric

Rome: Battery Electric

Americas Asia-Pacific Europe

N. America LAC Asia Oceania Europe

5 2 9 2 10

THERE ARE LESSONS TO BE LEARNT FROM THESE EXAMPLES:

WE REVIEWED OVER 60 REAL WORLD CASES AND FOCUSED ON

UNDERSTANDING 20 IN DETAIL

41%

15%

44%

Technologies

Batteryelectric

Opportunitycharging

Hybrid electric

WE FOCUSED IN UNDERSTANDING HOW THESE CITIES HAD

BUILT THEIR BUSINESS MODELS TO ACHIEVE IMPLEMENTATION

How to structureimplementation and distribute risks

What investmentsneed to be made?

Sources of funding to payfor theinvesments

How to mobilizeinvestmentcapital

Buses de bajas

emisiones

Delivery mechanisms

Financial products

Investment components

Funding sources

WE IDENTIFIED SEVERAL SUCESS FACTORS THAT SOME CITIES

HAVE BEEN DEPLOYING TO ACHIEVE IMPLEMENTATION

1. Grants2. New

stakeholders

3. Operational innovations

4. Innovative financing

WE IDENTIFIED SEVERAL SUCESS FACTORS THAT SOME CITIES

HAVE BEEN DEPLOYING TO ACHIEVE IMPLEMENTATION

1. Grants2. New

stakeholders

3. Operational innovations

4. Innovative financing

IN MOST REVIEWED CASES, THERE ARE GRANTS

PROVIDED BY NATIONAL OR SUB-NATIONAL

GOVERNMENTS

• Providing grants to pay for additional investment costs– One-time payments

– Throughout the life of the asset

• Grants for additional operational expenses.

WE IDENTIFIED SEVERAL SUCESS FACTORS THAT SOME CITIES

HAVE BEEN DEPLOYING TO ACHIEVE IMPLEMENTATION

1. Grants2. New

stakeholders

3. Operational innovations

4. Innovative financing

MANUFACTURERS BECOMING MORE INVOLVED AND

ELECTRICITY COMPANIES ENTERING THE

TRANSPORTATION BUSINESS

• Manufacturers assuming new

responsibilities

– Tranining for operators and

longer maintenance contracts.

– Providing financing

– Offering complete solution

packages that include charging

infrastructure.

Retrieved from Google Map

• Electricity companies providing:

• Long-term electricity price stability and lower prices

(i.e. bulk discounts).

• Paying for charging infrastructure

WE IDENTIFIED SEVERAL SUCESS FACTORS THAT SOME CITIES

HAVE BEEN DEPLOYING TO ACHIEVE IMPLEMENTATION

1. Grants2. New

stakeholders

3. Operational innovations

4. Innovative financing

MANUFACTURERS, OPERATORS AND AUTHORITIES

DEVELOPING NEW WAYS OF OPERATING

• Smaller batteries and

opportunity charging

schemes

• Fast top-up stations

• Battery swapping

schemes

WE IDENTIFIED SEVERAL SUCESS FACTORS THAT SOME CITIES

HAVE BEEN DEPLOYING TO ACHIEVE IMPLEMENTATION

1. Grants2. New

stakeholders

3. Operational innovations

4. Innovative financing

FINANCIAL MECHANISMS THAT CAN HELP REDUCE

THE ADDITIONAL RISK

• Reducing the cost of

financing by providing

guarantees.

• Longer depreciation

periods to pay for

additional costs

• Separating asset ownership & service provision

• Providing other ways of paying for the most

expensive assets (e.g. buses, batteries, charging

infrastructure) such as by leasing them.

WHAT OTHER MECHANISMS CAN TRANSIT

AUTHORITIES IMPLEMENT TO MAKE THESE

INVESTMENTS A REALITY?

KEY QUESTIONS TO ANSWER IN THIS SESSION

• What changes can cities introduce in their current model of acquisition, ownership, operations, etc. in order to facilitate the introduction of a significant number of low and zero-emission buses?

• What are the most appropriate innovations in business models that will allow to pay for the additional infrastructure required for low-emission buses, such as batteries and recharging stations?

• What responsibilities and risks should be taken by vehicle suppliers to make these technologies take off more massively?

TRANSFORMING TRANSPORTATION 2017, THURSDAY 12TH JANUARY

MERCI !Benoit Lefevre, PhD.Director Energy, Climate & Finance, WRI Ross Center for Sustainable Citiesblefevre@wri.org