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Tech Question of the Week: What are the main variables impacting the total cost of ownership (TCO) analysis for electric and compressed natural gas (CNG) school and transit buses?

First, it’s important to note that a TCO analysis will depend on several factors, which can vary based on region or site. In addition to the upfront vehicle purchase cost, a major factor impacting school and transit bus TCO is the upfront cost of procuring and installing infrastructure, and the cost of daily fueling. Please see below for a high-level overview of the cost inputs to consider, a broad discussion of some major cost factors, and resources for additional cost data.

TCO Inputs

Argonne National Laboratory’s (ANL) Alternative Fuel Life-Cycle Environmental and Economic Transportation (AFLEET) Tool (https://afleet-web.es.anl.gov/) is our go-to tool for analyzing the TCO of alternative fuel vehicles, including school and transit buses. Please note, there have been recent updates to AFLEET this year.

It may be helpful to review and adjust the default values in the Inputs tab of the AFLEET spreadsheet tool for an idea of the various factors that impact a TCO analysis. In no particular order, a high-level overview of key inputs used in AFLEET’s TCO analysis are listed below:

  • Location
  • Vehicle Purchase Price
  • Number of Vehicles Purchased
  • Years of Planned Ownership
  • Annual Vehicle Mileage
  • Fuel Economy
  • Maintenance & Repair
  • Fuel Price
  • Fueling Infrastructure
  • Financing Options

Many of the key infrastructure procurement and installation costs and daily fueling inputs will vary based on the region or site. For example, daily fueling in extreme-temperature operations (i.e., temperatures that require air conditioning or heating) will vary for buses, lowering fuel economy and increasing average fueling costs. Please see below for some additional cost variables based on the bus fuel type.

Upfront Infrastructure Costs and Daily Fueling

Battery Electric Bus (BEB)

Infrastructure costs for electric buses can differ significantly based on the type of charger and site. Any utility or facility upgrades to accommodate charging infrastructure needs will impact the overall project costs, especially depending on the scale of the transition that the fleet is considering. The cost of adding a few electric buses and chargers to the fleet looks a lot different than a full fleet transition and the accompanying upgrades. However, a longer transition timeline gives more time for capital costs to decrease as the technologies mature and potential supply chain issues are resolved.

For reference, you may want to refer to a 2020 report from the National Renewable Energy Laboratory (NREL), Financial Analysis of Battery Electric Transit Buses, which discusses parameters to prioritize when considering an electric bus investment (https://afdc.energy.gov/files/u/publication/financial_analysis_be_transit_buses.pdf). In particular, see Table 5 on page 27.

The electricity fueling cost for BEBs is location dependent. You may refer to the U.S. Energy Information Administration State Electricity Profile page (https://www.eia.gov/electricity/state/) for a snapshot of electricity prices in your state. While not captured in AFLEET, fueling costs will vary further depending on electric utility rate structure offerings such as a time-of-use (TOU) rate that allows fleets to avoid any high demand charges. Ultimately, charging off-peak with a TOU rate will lower the TCO for electric buses.

 CNG Bus

The cost of installing CNG infrastructure is influenced by station size, capacity, and the way the CNG is dispensed (i.e., fast-fill or time-fill). You may refer to an NREL report, Costs Associated with Compressed Natural Gas Vehicle Fueling Infrastructure (https://afdc.energy.gov/files/u/publication/cng_infrastructure_costs.pdf?447f42ad57) for an overview of factors to consider in the implementation of fueling stations and equipment. In particular, please refer to PDF page 11 and 12 for example applications and station sizes, and relative cost ranges.

It may be worthwhile to consider fuel price volatility of CNG when determining CNG fueling costs for TCO. For example, based on the Clean Cities Alternative Fuel Price Reports, the retail price of CNG on a gasoline gallon equivalent basis has gone up nearly 50% between January 2021 and January 2023 (https://afdc.energy.gov/fuels/prices.html). That said, fleets may have the ability to purchase CNG at lower and less variable rates than retail customers. As such, we recommend working with your local CNG provider to determine your specific fuel price contract costs for your needs.

Vehicle Cost Resources

Beyond default AFLEET values, you may be interested in the following resources for electric and CNG bus cost data. Please note that we aren’t aware of many recent publicly available resources on CNG bus costs. Additionally, it’s possible that more electric and CNG bus cost data will become available as a result of some of the federal incentive programs that have received funding under the Inflation Reduction Act (e.g., Clean School Bus and Low or No Emission Grant (Low No) Program):

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