The adoption of electric buses is gaining momentum, but governments often face market barriers that prevent uptake. WRI provided technical assistance to plan for and procure nearly 1,000 electric buses in three cities, including the two largest fleets outside China. The new buses are expected to lower operating costs and improve local air quality while also reducing greenhouse gas emissions.

The Challenge

Many cities in Latin America have aging bus fleets that contribute to ground-level air pollution and, as a result, increased illness and mortality. Converting these fleets to electric buses (e-buses) can dramatically reduce health problems and greenhouse gas emissions. E-buses also have lower operating costs, making them an attractive alternative for transit systems. But cities face significant barriers to broad uptake. WRI research on lessons from 16 early-adopter cities finds that one of the biggest barriers is the higher upfront cost of e-buses and a perceived lack of options to finance the difference.

WRI’s Role

WRI built trust with transport and environment officials at the local and national levels in Chile and Colombia through support of major transit projects. Starting in 2016, Santiago, Bogotá and Medellín had to decide which technology to use as they began to renew their bus fleets. E-buses seemed a good option, but the cities were primarily concerned with higher upfront costs. WRI research on business models for adoption of e-buses, guidance on operating such fleets and international comparison of upfront and operating costs informed practical solutions to these concerns. WRI worked with partners including C40 and the Inter-American Development Bank to overcome the upfront cost barrier, proposing a scalable contractual and procurement mechanism that allows local governments to tap into previously hidden sources of financing, including from utilities and the private sector arm of multilateral development banks.

The Outcome

Santiago and Bogotá issued tenders for the purchase of close to 400 and 500 e-buses, respectively, and are procuring the two largest e-bus fleets in the world outside China. Additionally, Medellín purchased a fleet of 64 e-buses. The e-bus fleets are more energy-efficient and are expected to lower operating costs while reducing local air pollution and global greenhouse gas emissions, helping Chile and Colombia achieve their national climate targets. In addition, with financial and contractual models that can potentially be adapted elsewhere, more cities are likely to take notice. WRI will continue to conduct research and provide technical support on e-buses, with the hope they become commonplace around the world.