2024-02 SUSTAINABLE BUS

OUTLOOKS
A PWC STUDY LOOKS AT THE TCO OF ZERO EMISSION BUSES
THE COSTS OF E-MOBILITY
THE AUTHORS
Maximilian Rohs is Director
Infrastructure & Mobility at
PwC Germany
(maximilian.rohs@pwc.com).
Felix Krewerth is Senior
Associate Infrastructure &
Mobility at PwC Germany
(felix.krewerth@pwc.com).
Where now for Germany’s zero
emission bus market? Can the decade
of the e-bus be sustained? Financial
support is crucial for hitting targets.
Focus on TCO, procurement’s methods,
standardization
Around 2,900 buses affected
by the Clean Vehicles
Directive are procured each
year in Germany. In the
first period of the directive,
which runs until the end
of 2025, at least 22.5% of
these buses (approx. 650
buses per year) must be
zero-emissions. This figure
will rise to 32.5% from 2026
onwards, or around 950
zero-emissions buses per
year. German operators
have demonstrated that
they can achieve these
procurement targets if the
conditions are right: 2023
saw over 770 zero-emissions
buses enter service in
Germany.
For many German bus operators,
the changeover to a zero-emissions
fleet is in full swing. Many others
have ambitious plans ready to go.
But as with most things, this transition has
a price: decarbonising bus fleets requires
heavy investment. The Federal Ministry for
Digital and Transport (Bundesministerium
für Digitales und Verkehr, or BMDV) re-
cently extended its comprehensive funding
programme for zero-emissions buses, but
has now had to cancel this programme following
the high-profile ruling by the Federal
Constitutional Court on 15 November 2023
concerning the German Federal Government’s
Climate and Transformation Fund
(Klima- und Transfomationsfonds, or KTF).
The Federal Government had financed the
KTF by transferring €60 billion of borrowing
– authorised during the Covid-19 pandemic
– into a Federal Special Fund for use
over subsequent financial years, an action
which the court declared unconstitutional.
With this source of funding now having
dried up, does this mean that operators in
Germany will have to reconsider their plans
for electric bus fleets?
Federal subsidies’s role
With the BMDV programme now having
been withdrawn, continuing the changeover
to electric buses is set to be a major economic
challenge for the sector. The first three
rounds of funding were massively oversubscribed,
and analysing total cost of ownership
(TCO) data explains why: despite
electric buses being cheaper to operate than
traditional types, these savings do not fully
offset their much higher procurement costs –
particularly in the case of battery buses.
Based on PwC’s cost model, our TCO analysis
factors in all costs that are directly associated
with a bus and putting it into service,
using an example which compares the
capital costs (CAPEX) and operating costs
(OPEX) of non-articulated diesel and battery-electric
buses. All expected costs were
aggregated and then divided by the bus’s
service life (12 years) at the point of entry
into service (2024). The operating cost analysis
included dynamic diesel and electricity
prices – for example, it factored in the increases
in carbon taxation which are expected
to occur in Germany. The values shown
in the diagram below are averages over the
bus’s service life.
Comparing the TCO clearly shows where the
additional costs lie for battery buses: namely,
in the capital costs of the buses and the
necessary infrastructure. Based on current
information, including more than 1,000 price
points for battery buses, the average procurement
price of a non-articulated battery-electric
bus is around €600,000. This has to be
financed by the operator, and is around 2.5
times more than for a diesel bus of the same
size, which has a price tag of only around
€260,000. The now-withdrawn funding pro-
grammes for electric buses provided subsidies
for 80% of the additional capital costs,
thus reducing the costs to be borne by the bus
operator to around €330,000. Under the assumptions
used for our analysis, this would
bring the TCO of battery buses down very
close to that of diesel buses.
One-to-one replacement is possible
Provided that vehicle schedules are suitably
modified, practical experience has also
shown that a gradual changeover to battery-electric
buses (as generally practised in
Germany) can usually be achieved without
needing to procure a large number of additional
vehicles to compensate for their shorter
range. As the technology currently stands,
however, a rapid changeover may require a
certain number of extra buses (and therefore,
COST PER KM
1,80€
1,60€
1,40€
1,20€
1,00€
0,80€
0,60€
0,40€
0,20€
0€
0,32 €
0,77 €
0,36 €
solo diesel
vehicle capex
charging infra capex
workshop infrastructure capex
energy opex
maintenance vehicle/infra opex
battery replacement opex
0,02 €
0,14 €
0,31 €
0,41 €
0,07 €
0,82 €
solo BEV
Total Costs of Ownership by drivetrain
in €/km (12 m bus, base year 2024, 60.000
vehicle-km p.a., 12 year utilization)
Source: PwC
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