The Quebec government’s electrification targets for school buses are creating a ripe market for Vancouver-based 7Gen. The company has just launched turnkey financing for smaller school bus operators that it says will make it easier for them to purchase new zero-emission vehicles.
The company believes it can put about 700 electric school buses on Quebec roads within three years, and has set a goal of electrifying 3,000 vehicles by 2035. That doesn’t seem too ambitious, since Quebec has set a goal by 2030 of electrifying 65% of the approximately 11,550 school buses that travel more than a million kilometres every day that schools are open.
This means that at least 7,500 buses will need to be replaced within six years, or just over 1,200 buses per year. 7Gen has therefore convinced the Fédération des transporteurs par autobus (FTA) to let it act as an intermediary between its members interested in this transition and financial institutions as well as vehicle and logistics equipment manufacturers (charging stations, management software, etc.).
“A new electric bus costs three times more than a diesel bus, between $350,000 and $400,000. For a small carrier that operates 10 or 20 vehicles, that’s a lot of money,” says 7Gen’s vice-president of marketing and business development, Frédéric Bel.
We are no longer in the shortage of a year or two ago.
7Gen offers financing in the form of a lease, a rental to buy a vehicle, and that runs for 8 to 10 years. This financing covers everything — the vehicles, the charging infrastructure, the software. The company recoups government purchase assistance as well as carbon credits that can lower costs for the carrier.
“And there, with the FTA, if we can do it for 100 buses or more at once, by grouping the demand, it allows us to negotiate better purchasing conditions than if each carrier does it individually,” said Mr. Bel.
Towards a postponement of the 2030 targets?
The model that 7Gen is proposing to school transporters is the same one that the company has been offering since last fall to Quebec SMEs that want to buy an electric van. In both cases, the company believes that manufacturers will be able to supply enough vehicles to meet demand and, ultimately, for the government to meet its targets for reducing GHG emissions from heavy and commercial transportation.
“We’re no longer in the shortage we had a year or two ago,” assures Frédéric Bel. That said, it may not be that simple. To obtain maximum purchasing assistance from the government, carriers must buy buses made in Quebec. However, the choice is limited. Lion Électrique, in Saint-Jérôme, and Girardin Blue Bird, in Drummondville, are essentially the two options, and their production rate does not seem sufficient.
In any case, before the Chamber of Commerce and Industry of Greater Lévis, the Minister of Economy, Innovation and Energy, Pierre Fitzgibbon, admitted that the too small number of electric buses currently available could force his government to postpone its objective of seeing 65% of school buses be electrified by 2030.
Pierre Fitzgibbon was responding to a statement from the Bus Carriers Federation, which deplored government aid and supplies that were too weak, as well as a deadline that was too short.
The minister recalled that provincial aid had already been increased, and that it probably won’t be increased any more by 2030. “The question is: are we moving too fast in electrification?” he then asked, according to comments reported by The sun.
At 7Gen, we’re not too worried about the situation. On the contrary, we think that consolidating the supply will make everything simpler. “We’re taking care of consolidating all the needs, the Canada Infrastructure Bank and other partners are covering the financial needs… It should make life easier for school bus operators so that they only have to focus on transporting the children,” says Frédéric Bel.