AFK Stock Showdown
Chinese Company To Manufacture Electric Bus Fleet For South Africa
By Dana Sanchez Published: October 25, 2016, 3:02 pm
BYD electric test bus in New York City. Photo: clondoner92.blogspot.com
A Chinese company has won a $9.14 million contract to supply 11 battery-powered electric buses to Cape Town, which hopes to become the first city in Africa to use electric buses for public transport.
BYD Company Ltd (it stands for Build Your Dreams, according to HTXT) is a Chinese manufacturer of automobiles and rechargeable batteries with corporate headquarters in Shenzhen, China. It has a facility in South Africa and is the parent of BYD Motors Inc. based in Los Angeles, Calif.
The high cost of electric buses has been a barrier for the industry, according to Persistence Market Research. They cost about twice as much as their non-electric counterparts. But as crude oil prices fluctuate, the global electric bus market is predicted to grow 28 percent by 2020.
BRICS countries – Brazil, Russia, India, China, and South Africa — have the largest combined public transport system, and are expected to present the most lucrative opportunities for electric vehicle penetration. By the end of 2020, China is expected to account for nearly half of the global market.
BYD Company Ltd is a prominent player in the global electronic bus market. Others include U.S.-based Proterra, Sweden-based AB Volvo, Germany’s Daimler AG, Poland’s Solaris Bus and Coach S.A., Germany’s ZF Friedrichshafen AG, China’s Zhongtong Bus & Holding Co., Ltd, and India’s Ashok Leyland.
“Cape Town’s deployment of electric buses is the first showcase of a clean and sustainable transport system in Africa,” said AD Huang, general manager of BYD Middle East and Africa auto sales division, in a BYD press release. “The success of this project will encourage other African cities to develop their own green public transport projects.”
Other African countries besides South Africa have made first-mover claims on electric buses, according to an earlier AFKInsider report.
France-based Bolloré Africa Logistics had electric buses in use in Cameroon in 2014, the company said in a press release.
An investment company controlled by French billionaire Vincent Bolloré, Bolloré employs 25,000 people in 45 African countries through 250 subsidiaries, Bloomberg reported in 2013.
Bolloré claims to be a market leader in Cameroon’s integrated logistics sector and developer of the first electric bus line in Central Africa. The first electric buses went into service in May 2014 in Cameroon and they’ve been used to transport students at the University of Yaoundé 1, Bolloré said.
Uganda’s Kiira Motors unveiled Africa’s first solar-powered electric bus prototype, the Kayoola, BBC reported in February. Now the company seeks investment from international companies and vehicle parts makers — essential, it says, for the project to take off.
If it is mass produced, each bus will cost up to $58,000 — a competitive price — said Paul Isaac Musasizi, Kiira Motors’ CEO.
The benefits of electric buses include less noise than traditional diesel engines, a smoother ride, and environmental friendliness. South Africa’s BYD electric buses should be able to travel at least 250 kilometers (155 miles) in traffic before the batteries need recharging
Transportation accounts for 34 percent of carbon output in Cape Town, population 3.8 million. The city wants to reduce carbon emissions through policies that affect households, businesses, electricity generation and the city’s transport system.
The carbon emissions target reduction is 3.2 percent by 2020, BYD reported.
BYD’s successful bid for the South African contract follows its launch of a global first – an emissions-free pure electric double decker that hit the London streets in March, BYD reported. It’s one of a fleet of five.
BYD has supplied photovoltaic modules to one of South Africa’s largest solar farms in Prieska. It also delivered the first containerized energy storage system to Johannesburg in February 2015 and home battery storage system B Box to the South Africa residential market in 2016.
The electric buses made for South Africa will be partially manufactured and assembled locally, Cape Town mayor Patricia de Lille said, according to an ENCA report. “Apart from lowering our carbon emissions, local residents will also benefit from this contract through job opportunities,” she said.
The $9.14 million BYD contract includes the buses, ancillary equipment, services, training, and will be partly offset by income generated from selling carbon credits, ENCA reported. Delivery is expected in June 2017.
BYD will also supply charging stations, data management centers, spare parts, tech support and training for bus drivers and mechanical staff, fleet maintenance and battery replacements, HTXT reported.
“As we reduce our carbon footprint, Transport for Cape Town will earn carbon credits which the city will be able to sell on the international market,” De Lille said. This will be accomplished “through mechanisms provided to signatories of the Kyoto Protocol as well as on local emerging markets as a result of the current SA Carbon Tax Act and the carbon offset regulations.
“We are really looking forward to this day,” De Lille said.
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