It's time for Silicon Valley to start buying electric commuter buses
Every weekday, 10 commuter buses owned by biotech company Genentech join the ranks of the over 1,000 private buses that shuttle employees across the San Francisco Bay Area from near their homes to and from corporate campuses. Genentech's buses look mostly like all the others (between 35 and 45 feet long), and they come complete with perks that Bay Area riders have become accustomed to such as Wi-Fi and electric power outlets. But they also have one particularly unique internal feature: They're powered by batteries.
Genentech has been running electric commuter buses made by electric bus maker BYD to transport commuting employees — from as far as Vacaville and San Jose — to its headquarters in South San Francisco since the summer of 2018. This month, the company will receive 11 more electric buses and is planning to add another 10 by the end of the year, the company tells GreenBiz. That means that by the end of 2020, close to half of Genentech's more than 60 commuter buses, called GenenBuses, will be electric.
With the rapid emergence of electric transit buses, combined with tech companies' wealth and aggressive sustainability goals, you'd think that electric commuter shuttles such as Genentech's would be all the rage in Silicon Valley. But the biotech company, a division of Swiss pharmaceutical giant Roche, was the first Bay Area employer to put a sizable amount of electric commuter shuttle buses, running long ranges, on the roads.
The market for electric commuter shuttle buses is nascent, thanks to a combination of a lack of available models and batteries that only recently have reached a low-enough cost and long-enough range to move a bus for at least 200 miles on a single charge. The economics for electric buses are about "two to three years behind the economics you're seeing in the passenger electric vehicle segment," said Colin McKerracher, head of advanced transport at Bloomberg New Energy Finance (BNEF).
And unlike California's mandate that says all public transit buses in the state must be zero-emission by 2040, private companies are driven by sustainability goals and employee retention, not regulation. Although later this year, the California Air Resources Board (CARB) likely will finalize the Advanced Clean Trucks rules, which eventually could call for owners of heavy-duty commercial vehicles to adopt zero-emissions vehicles.
But as more e-commuter bus models become available this year, and as more tech companies embrace the environmental and potential economic benefits of electrifying fleets, Genentech won't be the rare employer with an electric commuter bus fleet for long. Others such as Facebook and commuter bus operator Hallcon are adding electric buses to their fleets.
Genentech, which makes medicines for diseases including cancer, cystic fibrosis and influenza, sees over 12,000 people commuting to and from its campus in South San Francisco every day. About 2,500 of the companies' employees — engineers, scientists, technicians, sales execs — are daily riders on the dozens of buses in its commuter program, which has been running for over two decades.
Genentech, like its tech company peers in the Bay Area, is in fierce competition to attract and maintain the most talented workers in the face of a growing traffic crisis that continues to worsen. "We're focused on recruiting and retaining people at our campus. It's critical to improve the commute experience," said Andy Jefferson, director of transportation for Genentech, who's been with the company for over two decades.
For the past two years, Jefferson has been leading the company's transportation group and has helped usher in new projects such as sharing space on corporate commuter buses with neighboring companies to make bus routes more efficient and expanding the ferry lines that arrive in the nearby ferry terminal. But adopting electric commuter buses for most of its bus fleet by 2030 is arguably Genentech's most ambitious transportation plan to date.
In the summer of 2018, Genentech received four double-decker electric coach buses made by BYD, a Chinese bus maker with North American headquarters in Lancaster, California. Genentech's electric buses were the first commuter shuttle buses that BYD made, and over the course of the year, Genentech put the vehicles through their paces and provided BYD with feedback.
Genentech has been really happy with the results of its initial electric bus trials, describing them as both "fun and challenging," Jefferson said. He said today "we’re getting more range than anticipated. Were often seeing over 250 miles on a charge."
The biggest challenge, not surprisingly, has been figuring out the complexities for charging. "The big scary thing for any organization that’s bringing in a lot of electric vehicles is the infrastructure," he said.
To charge a fleet of dozens of electric buses, a company needs to collaborate, sometimes a year in advance, with the local utility to build out the supporting grid infrastructure. In Genentech's case, Pacific Gas & Electric had to install a new transformer to supply the bus charging depot.
But challenges aside, Genentech is doubling — well, tripling — down on the program. Last year, the company ordered six more slightly shorter electric buses from BYD that can pick up employees within San Francisco and that meet requirements of the San Francisco Municipal Transportation's (SFMTA's) commuter shuttle program. Jefferson described those buses as "clean and quiet," explaining "it's important to decrease noise and pollution" on routes within the dense city.
By the end of 2020, the company plans to add 21 more electric buses.
More models coming
BYD is the only manufacturer that can deliver a company any number of production-ready electric commuter buses today in the United States. But BYD isn't traditionally a coach bus maker. "The biggest thing holding back this market is the availability of models," BNEF's McKerracher said.
Other Bay Area companies are eagerly anticipating an electric version of a popular commuter bus from Belgian bus maker Van Hool, distributed in North America through ABC Companies. Van Hool coaches make up a good portion of fleets for tech companies such as Google and Facebook. On a recent car trip down to Silicon Valley, from San Francisco during commute hours, bus after bus was a Van Hool model.
This year, ABC Companies is bringing an electric Van Hool coach, the CX45e — developed in conjunction with electric bus maker Proterra — to market. The companies are showing it off in detail at the United Motor Coach Expo in Nashville later this month and delivering it to customers for demonstration trials in the first half of this year. In the second half of the year, ABC Companies plans to start commercial deliveries to customers that it says are already signed up.
Motor Coach Industries (MCI), a division of Canadian bus maker New Flyer, started testing out its electric coach bus, the J4500e CHARGE, with customers in 2019 and plans to ramp up production of the bus in 2020 and 2021. German bus operator FlixBus already has been using MCI's electric bus for some runs between Sacramento and San Francisco.
Thom Peebles, vice president of marketing for ABC Companies, said the demand is high for a pure electric commuter motor coach in the Bay Area. "2020 is an inflection point" for demand, supply chain, engineering and technology that will enable Van Hool electric coaches to arrive in Silicon Valley, Peebles said.
ABC Companies and Proterra aren't disclosing the first customers for the Van Hool CX45e bus. But both Google and Facebook are major Van Hool bus users, and both have strong sustainability programs.
In addition to helping companies meet sustainability initiatives, there's another reason for large companies to adopt electric buses: economics. Toby Kraus, vice president of strategic partnerships at Proterra, said the elimination of diesel fuel costs and the lower maintenance costs of electric buses mean electric commuter shuttle buses can deliver significant savings for companies. "There's a really compelling economic reason to operate these," he said.
It's even more economically compelling in California, which has had substantial incentives in place for public and private fleets that buy zero-emission trucks and buses. The Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) was created in 2009; it uses funding from California's cap-and-trade program to provide hundreds of thousands of dollars in funding for heavy-duty ZEVs.
However, CARB already has received requests for the entire $142 million HVIP budget for 2019 and 2020, so HVIP incentives have been put on hold for now. In addition, because of the early state of the market and the different ways that companies use commuter buses, the savings for electric commuter buses will vary and are still a little unclear.
Big year for e-commuter shuttles
All signs point to 2020 as being a breakout year for Silicon Valley to adopt electric commuter shuttle buses.
It doesn't make sense for a company such as Google — which aggressively has adopted 100 percent clean energy to run its operations and built out one of the first employee electric vehicle charging programs — to ignore the carbon emissions of its commuter shuttle fleet. Google didn't respond to requests for more information on the commuter bus program, and a spokesperson said the company doesn't currently have anything to share about the topic.
Many big tech companies are reticent to speak publicly about the details of their commuter bus programs, in general. Several years ago, Google buses were the targets of protests in areas of San Francisco, such as the Mission District, where some long-time residents have seen the buses as symbols of gentrification and being priced out of neighborhoods where young Googlers were moving in.
Apple didn't provide details about if it plans to electrify its commuter bus fleet. But a Los Angeles Times article from several years ago reported that Apple's entire commuter buses fleet runs on biodiesel, an alternative fuel with a substantially lower carbon footprint than diesel.
According to Apple's 2019 sustainability report (PDF), the company was able to reduce the carbon emissions related to employee commuting from 2016 to 2017, and kept it relatively flat in 2018, despite growing its employee headcount.
Partly because of companies' reserve in discussing these programs, it's hard to get a good read on how many companies are planning to adopt electric commuter buses. But there are some solid signs that more are becoming interested.
Hallcon, a 70-year-old company with headquarters in Kansas City, Kansas, provides transportation services for Bay Area companies including private commuter buses. Last summer Hallcon opened up a new facility in San Jose that Erik Zandhuis, vice president of commuter and shuttle for Hallcon, describes as "advancing progress in sustainable transportation." The facility has infrastructure built out for charging, maintaining and repairing electric and hybrid vehicles.
A few years ago, Hallcon acquired Bay Area-based Loop, which at the time of the acquisition operated commuter shuttle buses for Google, Facebook, Apple and LinkedIn, and had the eighth-largest private bus fleet in the United States operating over 300 shuttle buses. Hallcon operates between 400 and 500 vehicles in the Bay Area, Zandhuis said.
Hallcon has been working closely with electric bus makers and already has been running some electric buses on routes. The company is in discussions with some clients to have more e-buses coming, Zandhuis said.
Facebook acquired 43 small BYD electric shuttles for its campus circulation fleet in 2018, and late last year started testing out a double-decker BYD electric bus for commuting purposes. The company plans to test out more electric commuter buses in 2020. Facebook's Director of Corporate Media Relations, Anthony Harrison, said that Facebook has found that the biggest challenge to building out an electric commuter bus fleet is "establishing the charging infrastructure needed to support a system at our scale."
Bay Area commuting conundrum
There are 1,020 private commuter shuttle buses that operate on a daily basis in the San Francisco Bay Area across nine counties, according to the most recent data from the region's transportation planning agency, the Metropolitan Transportation Commission. In comparison, about 3,100 public transit buses operate across the same geography.
So about a quarter of the big buses that are moving people around the Bay Area to and from work are privatized. It's a unique scenario resulting from a combination of a lack of quality public transportation and last-mile commuting solutions; the Bay Area's bifurcated growth between San Francisco and Silicon Valley; and wealthy tech companies that are competing for talented employees with commuter perks. It's a complicated problem, created by the Bay Area's housing crisis, inequality and transportation growth, among other things.
Private commuter buses, even those that run on fossil fuels, are a good sustainability tool. They take employees' private cars off the roads and reduce traffic and carbon emissions, despite the occasional vilification of these vehicles.
But it's time for these buses to become a bigger part of the sustainability solution. Batteries have arrived to do just that, and 2020 looks like it'll be a crucial kickoff year for the first phase of electrifying the Bay Area's private commuter buses.