Proterra electric buses experience surge of interest as cities invest in clean transit

Update: This story has been modified to reflect that in addition to Proterra's facility in Silicon Valley designing drivetrains for the buses, the company's Greenville plant also designs them. The company's plants in Los Angeles and Greenville make them.

About 13 years ago, a guy in Golden, Colorado, decided to start an electric bus business.

The idea was to build cleaner, quieter buses to help ease pollution in the nation's congested corridors.

Years later, he moved that business to Greenville, to digs at a site on Whitlee Court near Interstate 85. Now that business, which has a significant footprint in Greenville and headquarters now on the West Coast, is booming. And Greenville's electric bus facility and the community are reaping the benefits.

The Greenville plant is growing fast, so fast that the company expects to hire 50 new people at its local operation, up from the 200 that it currently employees, and is producing three to four clean buses a week.

"We're growing everywhere," said Cissy Nix, the company's human resources manager in Greenville. "We have currently posted positions."

These days, the company is also equipping the Greenville plant to serve the eastern half of the country, Matt Horton, Proterra's chief commercial officer, said. Transit authorities in some of the biggest eastern markets — New York, Philadelphia and Washington, D.C. — are receiving a combined 50 Proterra buses in 2018, he said.

The surge of new business is a result of federal grants to local governments and airports, along with new private-sector partners, that have opened up dozens of new markets for the manufacturer. At the same time, the company, which has its largest facility in Greenville but is headquartered in Silicon Valley, is seeing repeat customers, such as Clemson Area Transit, Horton said.

The result: Production will triple in 2018 compared with 2017.

"This year, and these are rough estimates," Horton said, "Proterra alone in the United States, we're receiving orders for about 5 percent of all the transit buses that have been ordered in the last year."

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Business hasn't always been so good. That's because electric buses cost more up front — about $700,000 (not including charging infrastructure), compared with about $450,000 for a typical diesel or natural gas bus. But, according to Proterra, agencies win in the long run because the lifetime operation and maintenance of electric buses is more than $400,000 less. Meanwhile, the technology is getting better and cheaper.

The potential win for everyone beyond the quieter rides is that the buses run without emissions. .

Still, the challenge for agencies remains coming up with the upfront capital to buy an electric bus — hence the Federal Transit Administration's so-called "Lo-No" grants for municipal low- or no-emission bus programs.

In 2017, 28 out of the FTA's 51 Lo-No grants went to agencies partnering with Proterra, said Eric McCarthy, senior vice president, government relations, public policy and legal affairs for Proterra. FTA grants totaled $55 million, including $1.45 million that went to Greenville Transit Authority.

"That opened up 27 new markets for us — including Greenville," McCarthy said.

Those and other contracts are now bearing fruit. Nearly 200 buses will roll out of the company's two assembly plants this year, company executives told The Greenville News, and the Greenville site will make about two-thirds of those — a total of 123.

Proterra has also outfitted a second assembly line this spring in Greenville, said Jason Lewandowski, Proterra's local site manager.

"Between the two facilities, we estimate we can produce more than 500 buses a year," Horton said. "We aren't planning to produce at that level just yet, but we do have that level of capability."

Scaling its manufacturing capabilities to meet demand, Horton said, is a welcome challenge — and a big reason the company opened a second, smaller plant in Los Angeles, which started producing finished buses at the end of 2017.

The Greenville plant shipped four buses to Washington, D.C., recently and another five to New York City (complete with "I love New York" decals). Also on the production line were several of the seven Texas-bound Dallas Area Rapid Transit buses on order.

The lease on Proterra's roughly 200,000-square-foot building in Greenville was up for renewal this year, and McCarthy said his company is negotiating an eight-year extension with two options to renew the lease for an additional five years each.

"You are looking at an 18-year commitment if we go the distance," McCarthy said.

Proterra's growth well outpaces that of the electric bus industry as a whole. A fall 2017 report from Navigant Research, a clean technology market research and consulting firm, found that sales of plug-in electric buses — like the ones Proterra makes — had increased 40 percent globally between 2016 and 2017. Increasing volume has decreased the costs of key components such as batteries, the report found, which has helped bring the total cost of buses down and push sales up.

More: $1.45M grant will allow Greenville to buy 2 Proterra buses

More: Proterra to use $55M investment to increase production at Greenville, LA facilities

"You can't go a week without reading how mobility is changing," McCarthy said. "Many cities and entire countries are pledging to go all electric. This is where transit is going, and Proterra is in the thick of it. It is an incredible time to be part of this space."

The first quarter of this year will be the company's busiest quarter ever, said Lewandowski, who Proterra recruited from Honeywell Aerospace last summer.

"I love it," Lewandowski said. "This is far and wide the most exciting job I've ever had — the growth, the public interest, what we are doing for the environment. I've never worked anywhere where year over year there was 300 percent growth."

To handle the increased volume, Proterra is hiring. By summer, the company plans to have 250 employees in Greenville.

The company has another 175 employees in California.

Proterra has added a shorter, 35-foot bus to its menu of options (better for shuttles), and is steadily increasing the range, power, lifespan and resilience of its batteries and drivetrains. In September, a Proterra bus broke a world record by traveling more than 1,100 miles on a single charge — a fourfold increase in range over its longest-distance bus in 2015.

Since June, Park City, Utah — a hilly ski resort town with average lows in the teens and 20s — has used six of the buses for its free transit service. Proterra's success there, McCarthy said, answers concerns about an electric bus's performance in the cold and up steep inclines.

"The battery technology in the last year and a half has significantly improved," McCarthy said.

The airports in Raleigh, Sacramento and San Jose, California, are adding Proterra buses to their fleets. Several national parks have also added Proterra shuttle buses. Yosemite bought two of them; Bryce Canyon and Zion are doing test runs with several of the buses.

A partnership announced in October with Belgian busmaker Van Hool has opened up the private motor coach and shuttle market, too, McCarthy said.

"Companies have taken notice," McCarthy said.

Van Hool, through its American distributor ABC Coaches, has 10,000 buses on U.S. roads, and Proterra will provide batteries and drive trains for the company's new line of electric coaches targeting corporate shuttle customers.

"A lot of these corporate customers want to go electric," McCarthy said.

Among additions to the Greenville plant is a curtained area where Proterra engineers work on special projects with undisclosed partners outside the transit industry on technology transferability. McCarthy said he could not elaborate further.

The production process at Proterra is rigorous.

The batteries of these buses are designed and made at the company's headquarters in Silicon Valley. The company also designs drivetrains there and at the Greenville plant; it makes them in Greenville and the other plant in Los Angeles. Proterra custom orders the rest, from composite bodies out of Rhode Island and Washington to locally made brackets. But don't mistake this for a simple assembly plant, Lewandowski said. Much of the design and engineering happens on site and is passed on to suppliers.

"We design a large portion," Lewandowski said.

Proterra and customer inspectors check every inch of the bus before it ships — three men holding flashlights were clustered around the bottom of a Brooklyn-bound MTA bus during a recent visit.

An inspector from Washington has been living in Greenville since September, spending his days at the plant to supervise construction of that city's 14 buses. That's typical, Lewandowski said, since these are major purchases, running into the millions.

"He sees it from the moment it hits the line through to the end," Lewandowski said. On a recent afternoon, 12 buses in various states of completion lined the assembly hall floor.

A big change he said he has seen in recent months is increased interest among agencies to buy or lease their own buses or bus batteries without federal assistance.

"Agencies are looking at ways to use their own money to buy these buses, not relying on federal grants," McCarthy said.

Dale Hill, who founded Proterra, describes his company as an overnight success "13 years in the making."

"We are really glad we got started when we did," Horton said. "We do fully believe the public transit market will go 100 percent electric, and we are the clear technology leader at this point."