(EDC is Canada’s export credit agency and a state-owned enterprise wholly owned by the Government of Canada)
Phillip Oldridge and Fraser Atkinson spent two years advancing a handful of electric vehicle projects when they decided that, to really make an impact in the marketplace, they needed to focus on one, game-changing product.
“We decided it had to be one thing that wouldn’t just simply be competitive, but also a disruptive influence in the industry,” says Atkinson.
The conclusion: An all-electric heavy-duty bus.
Today, the duo run Vancouver-based GreenPower Motor Company, an electric bus manufacturer that is steadily racking up contracts across North America. GreenPower’s initial focus is the development and sale of all-electric buses for transit operators, shuttle operators, schools, universities and government.
The company’s flagship product is the EV350 electric bus, a 12-metre-long coach that uses the latest electric drive, battery technologies and battery management system combined with a lightweight chassis and low-floor body.
The bus was launched in 2014, and is built using components from key suppliers such as Siemens for the two drive motors, Knorr for the brakes, ZF for the axles and Parker for the dash and control systems. Atkinson, GreenPower’s executive chairman, says the company’s original equipment manufacturer-based platform allows GreenPower to meet the needs of various operators, while also providing standard parts for easier and more accessible maintenance.
In the fall of 2015, the company announced a handful of deals with various transportation companies including EV Power Corp., a bus operation focused on the states of Nevada, Arizona, and Colorado, as well as California-based school bus and fleet operator Adomani Inc. and Florida-based transportation company AMC Transportation Services.
GreenPower has also signed a letter of intent to lease its EVC550 all-electric double decker bus to the Greater Victoria Harbour Authority and CVS Cruise Victoria Ltd., with an option to buy after three years. The pilot program will help those clients evaluate the feasibility for fully electric bus transportation for the cruise ship tourism industry in Victoria.
Listed on the TSX Venture Exchange GreenPower was recently described as a “compelling investment opportunity,” by Dave Hammond, an analyst with Optima Capital Partners.
“Admittedly, we’re early days but intrigued by the large market potential and recent developments suggesting meaningful sales are imminent,” Hammond wrote in a note on Nov. 4, citing the “rapid fire” of GreenPower’s company updates. “Momentum appears to be building, and we believe this is merely the first inning of what is likely to play-out over the coming three-to-five-plus years.”
Hammond also highlighted the evolving market for all-electric, plug-in buses, “to a point where they can effectively replace traditional buses.” The transit and school bus market in North America is also promising, Hammond says, noting there are about 70,000 transit buses in the U.S. and more than 15,000 in Canada, with an approximate life cycle of 10-to-12 years.
Atkinson says increased demand for clean energy vehicles and the significant drop in battery costs is driving the growth across the industry. For example, he notes cost of a battery used in an electric bus today is about $700 a kilowatt hour (kWh) compared to about $2,500 kWh just five years ago.
The capabilities of the batteries used and the battery systems have also improved, “making the use of the GreenPower buses a viable alternative to a traditional diesel bus,” Atkinson says.
“We’ve gone from a product that frankly, didn’t make a lot of economic sense and didn’t take you very far … to something that is not only competitive, but also saves money,” he says.
GreenPower says its buses, which cost about $1.05 million (U.S.) each for a double decker, can save companies about $50,000 in annual fuel costs compared to a diesel bus, not including maintenance savings. The payback, according to a case study done by one transit operator in the state of Washington, is five to six years compared to purchasing a diesel bus.
The company’s strategy going forward is to leverage its existing deals and target markets across eastern parts of North America, particularly the U.S.
“While we are well known on the West Coast, there are other pockets of the U.S. that have yet to hear about GreenPower’s products,” Atkinson says.
Q&A with Fraser Atkinson, Executive Chairman, GreenPower Motor Company
What was your first export sale?
To EV Power in October 2015. It was the sale of our EVC550 all-electric double decker bus. EV Power also became an authorized factory representative for the various GreenPower bus models in certain U.S. states. Later that same month, we announced the sale of two different models of our school bus to Adomani and have a letter of intent to purchase 20 more by the third quarter of 2016.
How did that first export opportunity arise?
We’ve been working with the group behind EV Power since 2014. It was a lengthy sell cycle. They did a lot of due diligence on the company and the management team. They also got to test drive our 40-foot, 2014 model year bus.
When it comes to exports, what do you know now that you wish you knew then?
I’m not sure we know the answer to that yet. The markets are so big we recognize that we’ll focus our energy in areas that may not be productive initially. But I wouldn’t undo any of it. I truly believe we’re at the right place at the right time.
How has the trading world changed since you started in business?
It has changed quite a bit. A few years ago everyone was dismissive of an all-electric bus because the price differential was too great based on capabilities. In the past year, that has changed. The perception of the pricing and economics of the market we’re selling into is going through a significant change. That’s even though oil prices are at down at a level that suggest we don’t enjoy the same cost savings as when oil was $100 a barrel.
What is No. 1 thing new SMEs need to know about export and trade?
You have to have the right relationships. We believe the partnerships we’ve been able to move forward with to date will be a huge part of our success going forward.