Rush hour Daimler, MAN missing out on electric bus boom

German cities plan to invest billions of euros in electric buses but market leaders Daimler and MAN are late to the party. That’s left the surging market wide open to newcomers, such as Warren Buffett-backed BYD.
Quelle: AP
NOT made in Germany.
(Source: AP)

German cities battling to cut CO2 emissions and diesel pollution want to roll out electrically-powered bus fleets as soon as possible and have been offered hundreds of millions of euros in public funding to make it happen.

But there’s a snag. There aren’t enough buses available because market leaders Daimler, maker of Mercedes-Benz and Setra buses, and MAN have been slow to develop them, leaving the market to foreign players such as Poland’s Solaris, China’s BYD and a variety of startups.

At present there are some 100 electric buses on German streets. Many have little-known names like Columbus, Ebusco or Sileo. They’re the ones driving development. Back in 2013, when Bremen began trying out buses made by various manufacturers, city officials were surprised that BYD, in which Warren Buffett’s investment firm holds a stake, was the only maker that could offer the desired range of 270 kilometers on one battery charge.

“That wasn’t available in Europe but the Chinese managed it,” said project leader Yusuf Demirkaya of city transport company Bremer Straßenbahn AG.

However, the Association of German Transport Companies (VDV), a lobby of mostly public transportation companies and their suppliers such as Deutsche Bahn and Bombardier, insist that “Asian manufacturers” don’t meet European quality standards. And municipal managers are worried that the new busmakers won’t provide adequate servicing.

Lucrative subsidies

Meanwhile the electric bus boom is passing Germany by. BYD has just announced the delivery of its 50,000th bus. Poland’s Solaris has delivered 200 buses to 38 cities and has orders for a further 200.

Daimler by contrast has only just begun delivering buses and MAN has said it won’t start series production until 2020. They’re missing out on a business worth billions of euros because demand for battery-powered buses is set to surge as looming diesel bans in German cities may also apply to the country’s 35,000 diesel buses.

VDV said local authorities have placed firm orders for a further 90 electric buses and federal subsidies are available for a total of 630. That amounts to an investment of €360 million ($406 million). Germany’s federal, regional and municipal authorities are making a range of subsidies available for the transition. At the federal level alone, the ministries of research, the environment, transport and economics are providing close to €400 million annually for this year and the following years.

Berlin plans to make its entire fleet of 1,450 buses emission-free by 2030 which means it will need up to 190 new electric buses per year. Berlin city transport company BVG plans to start out with an order for 90.

Can you hear them?

Meanwhile, with demand going through the roof, the price of e-buses is surging. A standard 12-meter-long e-bus now costs €570,000, up from €480,000 in 2015. A comparable diesel bus is much cheaper at €250,000 at most.



The new manufacturers are too small to satisfy demand. Dutch maker Ebusco designs the buses in the Netherlands and buys many of the components in Europe but has them assembled in a Chinese plant belonging to Australian firm Bus and Coach International, BCI.

Cities aren’t just waiting for bus deliveries. They’re also keen to find out what the vehicles will sound like. According to an EU directive, all buses must be fitted with a sound generator from July 1 to make sure that pedestrians can hear them. It’s not clear yet whether it will be a beep, a bell sound or an engine growl.

The head of VDV, Ingo Wortmann, said the transition to zero-emission buses won’t be as fast as hoped. He’s convinced that the only way to solve transport and environmental problems in the short term is to purchase modern diesel buses with Euro 6 standard engines. “Our vehicles are full. Diesel buses are the quick solution,” he said.

This is probably the sound Daimler and MAN like to hear.

Dieter Fockenbrock is the chief correspondent of Handelsblatt’s companies and markets team, focusing on op-eds, corporate governance and rail transportation. To contact the author: [email protected]