{"id":3497,"date":"2023-12-06T04:30:01","date_gmt":"2023-12-06T04:30:01","guid":{"rendered":"https:\/\/camcab.co.uk\/a-bus-is-a-bus-the-costs-of-excess-customization-enotrans\/"},"modified":"2023-12-06T04:30:01","modified_gmt":"2023-12-06T04:30:01","slug":"a-bus-is-a-bus-the-costs-of-excess-customization-enotrans","status":"publish","type":"post","link":"https:\/\/camcab.co.uk\/a-bus-is-a-bus-the-costs-of-excess-customization-enotrans\/","title":{"rendered":"A Bus is a Bus: The Costs of Excess Customization (EnoTrans)"},"content":{"rendered":"

Bus purchases represent one of the largest investments for most transit agencies in the United States. According to the American Public Transportation Association, in 2020\u00a0about 11 percent of all transit capital expenditures<\/a>\u00a0went toward passenger bus vehicles (known as \u201crolling stock\u201d.)\u00a0 The standard 40-foot bus is the workhorse of public transit in the United States, responsible for over 58 percent of all\u00a0transit trips<\/a>. Today, however, there is concern that the over-customization of new buses could be leading to higher costs for transit agencies and reducing the competitiveness of U.S. vehicle manufacturers.\u00a0<\/p>\n

Agencies customize buses for a host of reasons. For example, they provide unique branding for their vehicles with exterior wraps and matching color schemes, which helps transit agencies to be visible in their communities. Agencies may also customize to meet certain HVAC and engine needs specific to the geographic settings or climate patterns of their communities.\u00a0\u00a0<\/p>\n

But recent analysis of bus procurements suggests customization could be driving up costs in a detrimental or counterproductive way. When designing a bus for a new transit agency partner, an original equipment manufacturer (OEM) must go through a rigorous configuration review and may need to do additional engineering work to meet an agency\u2019s requirements. Manufacturers struggle to pass these costs on to the purchaser, making it difficult for them to stay in business. This is not just a problem for those companies, but fewer manufacturers reduces competition and hinders national public policy goals, such as\u00a0Buy America<\/a>.\u00a0<\/p>\n

On August 8, Proterra Inc, an electric bus manufacturer, filed for bankruptcy. While Proterra\u2019s path to bankruptcy was the result of\u00a0multiple converging factors<\/a>, the company\u2019s\u00a0Chapter 11 filing\u00a0notes that \u201ctransit agencies demand highly customized buses that align with the other buses in their respective fleets. Therefore, the manufacturing process requires customization, which makes scaling the business difficult and requires an extensive amount of working capital.\u201d Another manufacturer, Nova Bus, cited profitability challenges as the motivator for their withdrawal from the U.S. market by 2025. Our recent\u00a0analysis<\/a>\u00a0suggests that excess customization was a contributing factor.\u00a0<\/p>\n

Drawing a clear connection between excess customization and costs is admittedly difficult. For one, \u201cexcess\u201d is a subjective term and equipment that may have been considered optional in the past (e.g., security, farebox, and GPS technology) are now considered industry standards by most transit purchasers. Another issue that makes this analysis challenging is that bus manufacturers do not make their prices for standard base buses (which do not include the aforementioned options for security, farebox, and GPS equipment) publicly available.\u00a0\u00a0<\/p>\n

However, an analysis of data from\u00a0California\u2019s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Program (HVIP)<\/a>\u00a0offers a window into cost variance with transit bus procurements. The program\u00a0 was established in 2009 by the California Air Resource Board (CARB) to provide incentives for the purchase of zero-emission buses (ZEBs) to transition away more quickly from more heavily polluting vehicles. Data from this program from 2016-2022 spanning 255 purchased orders makes clear the vast range of purchase price for the same model of bus. For one model, even after removing the most egregious outlier, per-unit bus prices ranged from $800,000 to almost $1,300,000. The table below presents the price range for the six most popular ZEB models sold to FTA-grant eligible buyers within the California HVIP.\u00a0\u00a0\u00a0<\/p>\n

Source:\u00a0California\u00a0HVIP\u00a0purchase\u00a0order data, 2016-2022.\u00a0<\/em><\/p>\n

Expanding the analysis further to all transit buses\u00a0purchased\u00a0with HVIP in California illustrates that this is\u00a0a problem specific to transit agency procurements.\u00a0An analysis of 297 purchase\u00a0orders for\u00a035\u2019 and 40\u2019 ZEBs\u00a0(14 percent of which were to buyers not eligible for FTA discretionary funding)\u00a0indicates\u00a0that ZEBs bought by FTA eligible buyers\u00a0are\u00a0consistently\u00a0more expensive\u00a0than other buyers since 2017.\u00a0This gap has only worsened since supply chain bottlenecks and inflationary pressure\u00a0in recent years have\u00a0driven up\u00a0industry\u00a0costs.\u00a0\u00a0<\/p>\n

Continue reading<\/a><\/p>\n

The post A Bus is a Bus: The Costs of Excess Customization (EnoTrans)<\/a> appeared first on London Reconnections<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Bus purchases represent one of the largest investments for most transit agencies in the United States. According to the American Public Transportation Association, in 2020\u00a0about 11 percent of all transit capital expenditures\u00a0went toward passenger bus vehicles (known as \u201crolling stock\u201d.)\u00a0 The standard 40-foot bus is the workhorse of public transit in the United States, responsible for over 58 percent of…<\/p>\n","protected":false},"author":0,"featured_media":1439,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[60],"tags":[],"class_list":["post-3497","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-camcab"],"_links":{"self":[{"href":"https:\/\/camcab.co.uk\/wp-json\/wp\/v2\/posts\/3497"}],"collection":[{"href":"https:\/\/camcab.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/camcab.co.uk\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/camcab.co.uk\/wp-json\/wp\/v2\/comments?post=3497"}],"version-history":[{"count":0,"href":"https:\/\/camcab.co.uk\/wp-json\/wp\/v2\/posts\/3497\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/camcab.co.uk\/wp-json\/wp\/v2\/media\/1439"}],"wp:attachment":[{"href":"https:\/\/camcab.co.uk\/wp-json\/wp\/v2\/media?parent=3497"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/camcab.co.uk\/wp-json\/wp\/v2\/categories?post=3497"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/camcab.co.uk\/wp-json\/wp\/v2\/tags?post=3497"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}