The Economics of Bus Fleet Electrification: Guidance for Private Financing

: (Alternative Format Thesis)

Abstract

It has been demonstrated that electric buses are a low carbon alternative to traditional diesel Internal Combustion Engine (ICE) vehicles – primarily due to their zero tailpipe emissions and less carbon intensive fuel source. For this reason, local and national authorities have been keen to expand their rollout. However, despite evidence of lower operating expenditures from energy consumption and vehicle maintenance, the UK government has relied on several rounds of generous capital grants alongside a higher rate of Bus Service Operators Grant (BSOG) to encourage operators to electrify their fleets. In this thesis we investigate the evolution of the economic barriers to adoption that explain the private sector’s hesitance to decarbonise their fleets without financial support. Specifically, through the use of Total Cost of Ownership (TCO) simulations and financial statement modelling, we find that operational complexity (relating to vehicle scheduling, charging, and infrastructure requirements), fleet sizing, and vehicle maintenance are all factors with material impact on the economic cost and financial risk of fleet electrification. By analysing which barriers may remain or diminish, we translate our findings into policy implications relevant in the context of a once novel technology that has since matured and continues to experience improvements in cost and performance. Our outlook suggests that the economics of operating electric bus fleets has evolved such that the UK government can begin to reduce and withdraw financial support over the coming years. However, policymakers must do so while being more conscious of the heterogeneity between operators. Policies effective in relation to urban services provided by large operators may leave small and/or rural operations behind.

Date of Award	25 Mar 2026
Original language	English
Awarding Institution	University of Bath
Sponsors	EPSRC
Supervisor	Charles Larkin (Supervisor) & Winifred Huang (Supervisor)