The electric city bus business is changing rapidly and is highly competitive. When it comes to tenders, the price is what counts.
(Photo: Daimler Truck AG)
Vienna Daimler Truck is preparing for booming sales of all-electric buses – especially in local public transport. “The business development that we are forecasting is really a very positive one,” said the head of the Daimler Buses division, Till Oberwörder, on Monday.
Many transport companies would have to ban diesel engines from their fleets in the coming years due to the ever stricter emission regulations in the EU. As a result, Oberwörder believes that there will be broad growth in vehicles with batteries and fuel cells.
The manager announced that the company’s first production site would be completely converted to electric vehicles in the coming year. Accordingly, only the electric versions of the Citaro bus will be manufactured in Mannheim in the future, the combustion variants will no longer be available. “Only eCitaros from Mannheim – that shows the ramp-up of the market,” explains Oberwörder.
Daimler truck subsidiary: order backlog higher than sales plan
However, the business with electric buses at the subsidiary of the world’s largest commercial vehicle manufacturer Daimler Truck is still very small. Mannheim is also just one of several production sites of the company. In addition, the eCitaro is the only all-electric product from Daimler Buses in Europe to date.
According to the company, it was only able to sell around 450 eCitaros in 2022. In the current financial year, 600 to 650 units are targeted. That would be decent growth of more than 40 percent, but the jump is still at a comparatively lower level. The share of fully electric vehicles in the total sales of Daimler Buses in Europe was only around seven percent in the first quarter.
However, this figure also includes the sales of intercity buses and coaches. If you only look at the city bus segment, the proportion of electric vehicles is already significantly higher, emphasizes Mirko Sgodda, Head of Marketing and Sales at Daimler Buses. And the announced 650 eCitaros this year would only mark the beginning of the foreseeable e-boom. “The order backlog is significantly higher than our sales plan. That feeds our confidence,” says Sgodda.
The electric city bus business is changing rapidly and is highly competitive. When it comes to tenders, the price is what counts. The market leader in this segment in Europe last year was Yutong, a Chinese supplier that was relatively unknown to the public. This was followed by the next manufacturer from the Far East, a BYD joint venture. Daimler Buses only came third. This is shown by figures from the market research company Chatrou CME Solutions.
Overall, the market for electric city buses in the EU and Great Britain grew by a good quarter in the previous year from 3,300 to 4,150 vehicles. In the first quarter of 2023, more electric city buses were sold than diesel vehicles for the first time. A turning point. Many established manufacturers such as MAN, Volvo Buses or Iveco have to adapt and sometimes break new ground.
For example, Daimler Buses wants to combine battery technology with hydrogen-based fuel cells in the future. The company’s own eCitaro battery bus will be fitted with a fuel cell from Toyota as a “range extender”. This increases the range from 280 to a maximum of 400 kilometers. With the longer articulated bus variant, a distance of 350 instead of 220 kilometers should be possible without recharging. This means that in the future it will be possible to “replace all internal combustion engine applications,” explains Head of Sales Sgodda.
Electromobility: fuel cell and all-round carefree packages
Some of the vehicles can already be ordered. Daimler Buses does not officially name prices – probably also because the dual drive drives up the purchase price of the Citaro significantly. Electric buses have tended to be twice as expensive to buy as diesel vehicles. Subsidies and clever calibration of the total operating costs are therefore crucial.
The full performance of our buses only unfolds when embedded in an overall system. Mirko Sgodda, Head of Marketing and Sales at Daimler Buses
“The full performance of our buses only unfolds when embedded in an overall system,” says Sgodda. That’s why Daimler Buses wants to sell more all-round carefree packages to municipalities and their transport companies in the future. These include all possible services, from the charging station and connection to the power grid to the installation of transformers, battery storage and photovoltaic systems to maintenance and charging and depot management.
Operating a fully electric fleet is anything but trivial. Daimler Buses is therefore increasingly serving as a general contractor and has founded a new company for this purpose. According to Managing Director Dietrich Müller, Daimler Buses Solutions GmbH is already working on the implementation of 15 specific projects. The processed volumes vary between 200,000 euros and tens of millions – depending on the scope of the service.
“We see a great deal of demand,” says Müller. In addition to the existing projects, one is currently in intensive talks with a large double-digit number of customers and is taking part in tenders. The business is expected to grow rapidly, supplementing cyclical revenue from vehicle sales with ongoing service revenue, which tends to be more lucrative. Completely new concepts are also being considered, such as sharing sales with software partners.
Small and medium-sized fleet operators in particular have to think about whether they want to maintain their vehicles themselves to the same extent as before. Large investments are required to convert and train workshops and employees to handle high-voltage technology. In the future, some transport associations may prefer to concentrate on operating the vehicle fleet and outsource the service business.
Daimler Buses wants to score here; develops individual simulations, feasibility studies, operating concepts and hopes for implementation awards. “That’s the right way,” says Stefan Bratzel, head of the Center of Automotive Management (CAM). “In the course of electric mobility, vehicle manufacturers have to think beyond the sale of pure hardware.” However, the packages from the manufacturers have to be well made.
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