The State of The Electric-Battery Bus Market –
Due Diligence Completed By United States Transit Funding, Inc.
Marketing Practices Preclude Electric-Battery Bus Manufacturers From Receiving USDOT/FTA Regulatory Exemptions
Testing, Delivery & Performance Issues Related To Safety-Related Impacts
Up to $3.4 billion at stake nationally through VW Settlement and Fiat-Chrysler Settlement with EPA
January 22nd, 2019
Over the last 12 calendar months, United States Transit Funding, Inc. has been completing due diligence regarding the electric-battery bus manufacturing market in light of commercial motor vehicle funding through VW mitigation funding and the pending funding from the Fiat-Chrysler settlement with the Environmental Protection Agency (EPA).
As a part of the consent order decrees established between the EPA and each state that is assigned as a beneficiary, Class 4 through Class 8 on-road commercial motor vehicles (CMVs) are eligible action items where private and public entities are able to submit proposals for funding support in order to purchase new CMV units that aid in assisting non-attainment air quality jurisdictions (NAAQS) and achieve EPA ozone goals.
Because of the good work set forth by the EPA in their enforcement of the Clean Air Act, our due diligence took into consideration both diesel emission reduction and necessary safety-related impacts since safety-related impacts have to be considered so commercial motor vehicles can stay on the road and thus reduce diesel emissions through normalized bus utilization in terms of miles and hours.
Based on the completed due diligence, we have uncovered considerable safety-related impacts as well as mitigating data regarding diesel emission reduction and cost-effectiveness.
We have sourced all necessary information in this report and have gained all necessary confirmations found in this report through public documentation and with state and federal government officials.
Our report is comprehensive in nature knowing that the electric-battery bus manufacturer market has been marketing and attempting to sell its products to companies mitigating their perceived USDOT/FTA protections.
This is due to electric-battery bus manufacturers seeking to classify their products under exemption language that its manufactured products are precluded from USDOT laws despite attempting to market their products to companies who operate outside of an FMCSA air mile radius of 150 miles.
In order to operate a commercial motor vehicle that reduces diesel emissions, a manufacturer must deliver a commercial motor vehicle in accordance to United States Department of Transportation laws, rules and regulations.
Despite a CMV manufacturers’ obligations to adhere to USDOT laws, rules and regulations, the market has struggled to also adhere to contractual obligations under testing conditions.
In the last three months, public entities have released announcements of their own findings.
For example, the city of Albuquerque concluded to end its delivery with BYD and is just one of numerous empirical examples regarding the electric-bus battery market failing to adhere to USDOT/FTA/NHTSA standards. Source: https://www.masstransitmag.com/news/12436589/abq-rejecting-all-byd-art-buses-switching-to-non-electric.
Additionally, the Minnesota Valley Transportation Authority cited performance issues with Proterra stating that, under testing conditions, a single battery charge lasted only 40 minutes covering 16 miles and public entities like Springfield and Worcester, Massachusetts as well as Phoenix, Arizona each had issues with the performance of Proterra’s CMV products under varying weather conditions. Source: https://www.citylab.com/transportation/2019/01/electric-bus-battery-recharge-new-flyer-byd-proterra-beb/577954/.
The FTA also commissioned a report in February 2018 based on Proterra's technology where it was noted that King County Metro's battery electric buses had issues of which included: (1) the electric drive system, electrical system, cooling system, and transmission, (2) higher per mile fuel costs due to the price of electricity since electricity is traditionally a non-renewable resource unless generated by wind or solar, (3) mileage between service roadcalls in comparison to its CMV manufacturing peers, (4) parts avalability, (5) bus availability was reduced between 8 and 12% in comparison to its CMV manufacturing peers, (6) failed nitrogen oxides sensors and (7) during cold weather climates, the average monthly cost of maintenance and battery fuel costs were as high as $1.38 per mile. Source: https://www.transit.dot.gov/sites/fta.dot.gov/files/docs/research-innovation/115086/zero-emission-bus-evaluation-results-king-county-metro-battery-electric-buses-fta-report-no-0118.pdf
Because of the varying performance issues, we had to take a look at the connection between marketed language regarding air-mile radius range and safety-related impacts since each company is marketing their products to be able to perform outside of the 150-mile air mile radius pursuant to USDOT laws and regulations. What we have found is equally problematic.
A part of USDOT laws, rules and regulations includes the requirement for commercial motor vehicles to adhere to Federal Motor Vehicle Safety Standards (FMVSS).
According to the final FMVSS rule regarding electronic stability control, it states that the United States Department of Transportation expects “80 percent of new buses affected” by this rule in calendar year 2018. Source: https://www.transportation.gov/sites/dot.gov/files/docs/FMVSS-136-Final-Rule-05182015-final.pdf
Based on due diligence, we have learned that a series of manufactured commercial motor vehicle units are not meeting Electronic Stability Control requirements per independent testing results and verified by the National Highway Traffic Safety Administration (NHTSA).
In the last 12 months, we have learned and observed the application of the rule by commercial motor vehicle manufacturers of FMVSS 136 since this particular federal motor vehcile safety standard is directy attached to passenger safety regulations.
The new FMVSS requires that all Class 4 through Class 8 on-road commercial motor vehicles, especially those that are marketing their products for passenger utilization in and outside of a 150-air mile radius, is mandated to be equipped with electronic stability control technology as standard equipment.
Because of certain trade secret disclosure and knowing that Proterra has made certain nuanced statements and strategic business decisions prior to a possible Initial Public Offering (IPO), it appears that it is attempting to utilize VW settlement funds to boost value while attempting to nullify participation from other companies who meet FMVSS 136 even though they are not meeting this FMVSS mandate themselves.
Since Proterra’s business strategy is varied from its competitors, it is our continued view to provide information to decision makers and stakeholders to ensure that federal safety standards are met including FMVSS 136 for those seeking VW settlement funds.
It is our opinion that the Electronic Stability Control standard since it is a FMVSS mandate and therefore a United States Department of Transportation regulatory requirement that it should be considered a go/no go analysis for eligibility to market and sell commercial motor vehicles for utilization on public roads and for any funding resulting from Clean Air Act violations.
It is our recommendation and opinion that if a commercial motor vehicle is not meeting federal safety regulations and safety standards including but not limited to Electronic Stability Control (ESC) then it should not be eligible for utilization because without meeting federal safety regulations then they should not be able to transport a single passenger inside or outside of a 150-air mile radius.
Additionally, from a common safety practice, no CMV unit should be permitted to transport passengers in adherence to the FAST Act regardless until independent, 3rd party testing indicates that a commercial motor vehicle is meeting federal safety rules, regulations and safety standards, especially when it comes to standard equipment mandated by USDOT such as FMVSS and final rules to avoid roll-overs.
According to Proterra’s website as well as 3rd Party testing results that the company has completed, here is just some of the information that continues to lead to the conclusion that its units do not have mandatory Electronic Stability Control.
Also, Proterra’s units and their battery/electronic systems are not redundant-based with backup systems, hence the need for battery warranties priced over $50,000 per unit, leading to furthering concerns regarding the implementation of Electronic Stability Control and if there is a loss of battery power then both traction and stability control will be considerably mitigated.
Proterra states that it has “optional” traction control which clearly infers that it is not a mandatory requirement on their units as well. Source: https://www.proterra.com/wp-content/uploads/2018/05/PROTERRA-40-FT-SPECS_4.30.18.pdf and https://www.proterra.com/wp-content/uploads/2018/05/PROTERRA-35-FT-SPECS_4.30.18.pdf
BRAKES & SUSPENSION
|Regenerative braking; front & rear air disk brakes||4-wheel ABS with optional control||Multi-Link Air Ride rear suspension|
Additionally, there have been more than enough testing issues to raise further observatory concerns about the performance and safety-related considerations of the bus-battery CMV market.
For example, there was an April 2018 accident involving New Flyer’s own stability control issues where four were injured during a rollover incident during testing of which the event was, in part, due to the possibility where the potential of the battery placement being on the top of a bus was a considerable factor.
Also, Proterra has also announced that they are switching to SAE J3105 standards for overhead charging which may be translated to a change in the placement of battery packs within the chassis itself. Source: https://insideevs.com/four-injured-electric-bus-rollover-incident-during-testing/ and https://insideevs.com/proterra-switches-to-sae-j3105-standard-for-overhead-charging/.
As a part of our due diligence process, we learned one company who was delaying product introduction to the market due to not meeting a vital USDOT law and safety standard – FMVSS 136.
Because of the transparency provided, it prompted our company to ensure that each company being reviewed included mitigating safety-related considerations.
USDOT has, in full legal and regulatory effect, implemented FMVSS 136 of which is designed to protect passenger and employee safety during the course of any mode of passenger-carrier transportation and transit service for Class 4 through 8 on-road commercial motor vehicles.
During the course of each due diligence process with each manufacturer of Class 4 through Class 8 on-road heavy duty passenger-carrier commercial motor vehicles, our company identified Proterra, BYD, and New Flyer for due diligence purposes, because of each companies’ claims that their units are now designed to provide over-the-road and intercity transportation outside of the air mile radius of 150 miles of a garaging point.
Unlike BYD and New Flyer, Proterra, Inc. was engaged in public and private entities in so much that they were interested in selling their products so that their 35 and 40 foot Excelsior products were a part of a companies fleet for the purpose of operating outside an air mile radius.
This was due to the benefits that Proterra was offering of which included a travel radius that exceeded 400 miles on a single battery charge. While that was of interest for both inter-urban passenger-carrier transportation as well as the possibility of identified intercity transportation in a single state or across multiple state jurisdictions, our selection process was far more intricate in nature since there were both qualitative and quantitative measures that had to be considered.
Because of our due diligence approach, we utilized both a cost-benefit analysis through the EPA Diesel Emissions Quantifier (DEQ) as well as ensuring that commercial motor vehicle manufactured units was going to meet USDOT laws and regulations.
Based on Proterra’s public documentation, its testing reports, as well as contact with the Office of Chief Counsel for USDOT’s NHTSA, we had no choice but to view Proterra as well as BYD and New Flyer as ineligible to participate in federal procurement activities.
As a part of our due diligence review, we noted that Proterra was marketing itself as a manufacturer of commercial motor vehicles for passenger-carrier transportation since they were making claims that their 35 and 40 foot units are designed to travel outside of an 150-air mile radius which removes the company to receive exemptions from USDOT regulations.
Since Proterra was moving its sales and marketing strategy to manufacture 35 and 40 foot commercial motor vehicles to perform outside of an air mile radius, we performed due diligence that considered safety-related impacts. What we found is troubling. In all of Proterra’s technical specifications, it noted that the company has “optional” electronic traction control of which is related to the certain, operational handling requirements of a commercial motor vehicle.
Additionally, Proterra highlights the utilization of a lightweight carbon fiber chassis of which could mitigate the stability of a on-road Class 4 through Class 8 bus during the performance of passenger-carrier transportation and transit services depending on certain performance factors, including acceleration. Source: https://www.proterra.com/technology/bus-body/
As a part of our review, we also noted that Proterra made claims regarding speed acceleration where their 35 and 40 foot Catalyst products “have nearly twice the horsepower and acceleration” than a “standard diesel bus”. Source: https://www.proterra.com/press-release/proterra-introduces-the-duopower-drivetrain-for-its-catalyst-zero-emission-buses-at-apta/
Also, we noted that there was no language regarding the ability to “govern” speeds of a Proterra unit in order to mitigate and eliminate speeding as a part of their product lines.
Finally, in light of what we learned regarding the need for each commercial motor vehicle manufacturer being required to meet USDOT laws and regulations, we had to visit the compliance issue in reference to FMVSS 136 – Electronic Stability Control.Based on all specifications for the 35 and 40-foot Proterra products, the company is not meeting this vital and required safety standard. Source: https://www.proterra.com/wp-content/uploads/2018/05/PROTERRA-40-FT-SPECS_4.30.18.pdf.
Additionally, we reviewed their 3rd party, independent testing reports at the Altoona proving grounds. Source: http://apps.altoonabustest.psu.edu/
It is worth noting that Altoona is the leading proving ground in the United States of which its site is in the Commonwealth of Pennsylvania. Among the key elements within Proterra’s report that we noted was “durability driving resulted in ‘unscheduled maintenance and failures’ that involved a variety of subsystems.”
Those failures that are detailed in the report led to a further conclusion that Proterra’s units are not only not meeting FMVSS 136 based on the form and nature of the failures but could do harm to those that are riding a Proterra bus. Those failures that we noted include but are not limited to the following:
|Sub-System Failure||Odometer Reading At Time Of Failure|
|Broken Transmission Output Shaft||13,977 test miles|
|Failed Electric Drive Motor||15,000 test miles|
|Moisture in Battery Pack circuitry||13,604 test miles|
|Failed Transmission||9,284 test miles|
|Failed Traction Motor Resistor||6,019 test miles|
|Failed Battery Pack||3,644 test miles|
|Damaged Transmission Clutch Speed Sensor||2,219 test miles|
Each of the aforementioned sub-system failures, while traveling on a public road, would lead to a mitigation of passenger-carrier transportation and transit safety as well as not having any electronic stability control even if this system was in place. Following the review of the Proterra Altoona report, we also noted the following observations:
- In April 2018, there was a New Flyer bus that rolled over injuring three of which we had no choice but to further evaluate the safety considerations of a hybrid or electric commercial motor vehicle of which required contact with the United States Department of Transportation regarding federal regulatory compliance on safety-related considerations, including FMVSS 136. Source: https://insideevs.com/four-injured-electric-bus-rollover-incident-during-testing/
- This is not the first time where a company like New Flyer has had its units pulled out of service due to safety-related considerations which means if the units are not safe then they are also not going to reduce diesel emissions. Source: https://www.washingtonpost.com/news/dr-gridlock/wp/2017/10/04/after-metro-pulls-hybrid-buses-from-service-union-and-metro-offer-differing-accounts-of-the-issue/?noredirect=on&utm_term=.edd3288c93fe
- Based on the issues found in the Proterra Altoona reports as well as the New Flyer incident, we contacted the United States Department of Transportation and NHTSA to confirm which commercial motor vehicle manufacturers are meeting FMVSS 136.
We contacted the Office of Chief Counsel regarding Proterra, BYD and New Flyer meeting FMVSS 136 in light of the fact that the United States Department of Transportation stated “80 percent” of all commercial motor vehicle manufacturers are going to be impacted by the final rule of FMVSS 136. Source: https://www.transportation.gov/mission/safety/final-rule-heavy-duty-vehicle-electronic-stability-control
Since Proterra, New Flyer and BYD are marketing their products that include passenger-carrier and USDOT-regulated companies who operate outside of the 150-air mile radius, each company is required to certify that it meets FMVSS 136 and able to provide safe and effective passenger-carrier transportation.Because of this salient point, the manufacturers of those buses must also meet FMVSS and NHTSA laws and regulations in order to be a participating vendor of litigation funds arising from Clean Air Act violations.
Based on our contact with NHTSA, neither Proterra, BYD nor New Flyer is meeting FMVSS 136 regulations to date on any new bus that is going to be manufactured following the final rule of which is in full legal effect.
Because of this fact, if a company cannot manufacture a commercial motor vehicle so that it is placed into service without violating FMVSS 136 then it logically cannot be on a public road and thus cannot reduce diesel emissions since the products are not following all applicable USDOT laws and regulations.
Since Proterra is moving to the SAE J3105 standard for overhead charging stations, I can only offer the opinion that the new charging standard is now going to be similar to the New Flyer design for additional weight on top of a commercial motor vehicle.
Additionally, the CEO of New Flyer stated the following as well: “ Preliminary findings suggests operator error as the likely cause of the accident and not the position of battery packs on the New Flyer bus. Blaming the positioning of batteries is irresponsible speculation, and all North American electric bus manufacturers (New Flyer, BYD, Proterra and others) have provisions for some rooftop located batteries. It is irresponsible for any party to suggest without evidence that an incident involving a test bus at New Flyer’s facility has any relevance to battery location. All New Flyer buses on the road today meet or exceed all applicable motor vehicle regulations and safety standards.” Source: https://insideevs.com/four-injured-electric-bus-rollover-incident-during-testing/
The CEO of New Flyer and his statements leads me to two conclusions: (1) An engineering redesign of battery placement leads to an increased manufacturing barrier leading to increased cost and delays in market rollout. (2) Proterra also have rooftop-located battery system designs consistent with the SAE J3105 standard.
There is additional information which indicates that both Proterra and New Flyer have considerable barriers regarding the FMVSS mandate based on the J2735 Event Flags for passengers of which includes safety-related events such as ABS activation and stability control activation of which if Proterra offers “optional traction control” then it may lead to a degradation of any stability control as well as disseminating passenger-safety alerts during on-road transportation.
To conclude – unless each commercial motor vehicle product designed to serve passengers is not meeting FMVSS 136 as well as safety-related impacts related to sub-system failures leading to ESC failure then it should be not be able to participate in any funding related to EPA enforcement action and the Clean Air Act.
Many Thanks In Advance,
Chief Executive Officer
United States Transit Funding, Inc.