Electric Buses Save 100 Million Barrels of Diesel Fuel

Dear Shareholders,

Electric cars are becoming more and more popular. In March, for example, the Tesla Model 3 was the best-selling car in Switzerland and left the previous bestsellers, Skoda Octavia and VW Golf, behind. However, the development of electrically powered buses is almost even more impressive. As in the case of passenger cars, the music plays mainly in China. In Shenzhen, the metropolis of millions, the only buses on the road are electric – in absolute figures, that’s 16,359 vehicles. Not only do they save diesel, they are also significantly quieter than conventional buses.

Around 400,000 electric buses are now on the road throughout China.  Together they will save around 100 million barrels of diesel this year. This means that – ceteris paribus – more than 40 million tonnes less CO2 will be blown into the air.

The speed at which electrification is progressing in China can be illustrated by the example of the twelve million people metropolis of Shenzhen. It wasn’t until 2010 that the city administration met with the local bus and car manufacturer Build Your Dreams (BYD) to draw up a plan. The following year, the first 200 electrically powered double-decker buses were launched. The bus fleet now has 100% electric motors. At the same time, a good 12,500 taxis are also powered by electricity giving them a share of more than 60%. All taxis are expected to be electrified as early as next year.

While Shenzhen certainly plays a pioneering role, other large Chinese cities are following suit. Beijing plans to increase its fleet of electric buses from 1,000 to 10,000 vehicles by 2021. Then around 60% of city buses will be powered by electric motors. Recently, the Chinese capital converted two heavily used routes to electric buses. On both routes, around 3.5 million passengers are transported each year. This electrification alone will save 1,600 tonnes of CO2 emissions per year.

Western major cities start with electric buses

99% of electric buses deployed worldwide are on China’s roads; however, the big cities in the western industrial nations are also slowly becoming active. For example, Berlin’s public transport authorities plan to convert their entire bus fleet to electrically powered vehicles by 2030. The state of Berlin is supporting the project with 106 million euros. A further 48 million euros will come from the federal budget. As a result, the public transport company pays no more for the electric buses than it does for the purchase of new diesel buses.

London wants to purchase as many as 300 electric buses in the coming year if the vehicles currently being tested prove to be suitable for everyday use. The first electric buses are also on the road in Sydney and Los Angeles. This also applies to large cities in Italy and Norway. Just a few weeks ago, BYD presented a 27-meter-long giant electric bus that can transport 250 passengers. The vehicle will initially be used in South America. Overall, BYD cannot complain about a lack of demand. Transport companies are queuing up at the company to order new electric buses.

What the international roll-out of electric buses means for lithium demand can be illustrated by the following example: according to calculations by Bloomberg New Energy Finance, 1,000 buses with electric motors displace 500 barrels of diesel per day. 1,000 electric passenger cars only achieve 15 barrels a day. The situation will be the same for lithium: the production of an electric bus requires many times as much of the light metal as the production of a car with an electric motor.