President Donald Trump’s decision to pull the U.S. out of the Paris Climate Agreement in June drew international condemnation, but has had no impact on California’s push for dramatic cuts in carbon exhaust. Which is why startup electric-bus maker Proterra opened a new factory near Los Angeles to meet demand for zero-emission vehicles from transit agencies west of the Mississippi.
The $20 million factory is the second for Silicon Valley-based Proterra, which already builds Catalyst model buses in Greenville, South Carolina. The new 100,000-square-foot facility is in the City of Industry, an LA suburb zoned for factories, that’s designed to produce 400 buses per year and employ 100 assembly workers.
“I’m really impressed with people who invent stuff, who make stuff, who use their hands," Governor Jerry Brown said at ceremony to open the plant. "In my business we only use our mouths -- that’s our big expertise.”
The state's 50-year push for cleaner air and stricter environmental standards has given rise to companies like Proterra, Brown said. "This is a day to celebrate the human spirit, to not only invent but to take inventions to the point where they become commercial."
Brown was attending the factory’s opening ceremony a day after signing a law extending California’s “cap and trade” program that uses market forces to motivate companies to cut carbon emissions. At a signing ceremony in San Francisco on Tuesday, Brown said: "California is leading the world in dealing with a principal existential threat that humanity faces," according to Reuters.
Led by several former Tesla managers and executives, Proterra’s growth is being driven by municipal and regional transit agencies with mandates to replace aging diesel and natural gas buses with electric models with no tailpipe pollution. Chief Executive Officer Ryan Popple told Forbes last year that he’s working to ensure that battery-powered buses supplant petroleum-powered models long before consumers stop buying cars and trucks running on gasoline.
“This is the launch of our West Coast manufacturing operation, which was just a dream two years ago,” Popple said. California's push for cleaner vehicles, capped by the extension of its cap and trade program this week, benefits Proterra's plans, he said.
The bi-partisan legislation provides "regulatory certainty and consistent commitment to business and consumers in California," Popple said. "Red states and blue states and cities throughout the country, they're leading with this technology. They are farther ahead than a lot of people assumed."
Shortly after Trump announced his decision last month, Proterra raised $55 million in a Series 6 funding round that came on the heels of a $140 million in a Series 5 round in January. The company has suggested it may proceed with an IPO by 2018.
(For more see Proterra's Ryan Popple Is On A Mission To Electrify The Transit Bus Business.)
Locating the plant near Los Angeles may also benefit Proterra’s longer-term business. LA Metro, the countywide agency that serves the city and numerous adjacent communities, intends to convert its current fleet of more than 2,000 natural gas buses to electric by 2030. To do that it’s already committing $138 million to buy its first 100 battery buses – though Proterra didn’t win its initial orders.
Canada’s New Flyer, the largest supplier of transit buses in North America, and China’s BYD, which is partly owned by Warren Buffett's Berkshire Hathaway and also has a bus assembly factory in Southern California, are sharing the agency’s initial awards, LA Metro spokeswoman Kim Upton told Forbes.
Still, there are about 1,900 LA orders to go and thousands more from other agencies across the country. Foothill Transit, in nearby Pomona, is already among Proterra’s biggest customers and like LA Metro is converting its fleet of hundreds of buses to electric by 2030.
Proterra’s Catalyst buses have range from about 50 miles per charge – which are intended to be recharged rapidly throughout the day – to as much as 350 miles per charge for agencies seeking longer range and less frequent charging. The average Proterra bus sells for $700,000.
That’s at least $200,000 more than for a diesel or a natural gas model, but the operating costs are much less. Fuel and maintenance expenses work out to an estimated $64,000 a year for a diesel bus, compared with $27,000 for an electric model, Proterra told Forbes.
