NOVA BUS CEO SEES A GREENER TRANSIT FUTURE
By François Shalom, The Gazette, November 30, 2012
Discussed and debated for many years, the revolution is upon us, insists Gilles Dion.
No need to dust off your Karl Marx, though. The president and CEO of Nova Bus in St. Eustache is convinced that “mobility” is undergoing a fundamental and inevitable transformation on two fronts: toward more mass transit, as mapped out by the European model, and toward greener modes of transport. Not because we’re more virtuous, but because we no longer have a choice.
“We’ve hit the wall,” said Dion in a recent interview at the Nova Bus head office.
“That’s become obvious,” he added, noting that on his drive to work that morning, Highway 13 southbound heading into Montreal was bumper-to-bumper — total gridlock. “That’s not sustainable. And we’re not New York or L.A.”
So Nova Bus, wholly-owned by Volvo AB, said Dion confidently in a recent interview, will certainly be at the vanguard of the industry when the shift to more energy-efficient vehicles is the law of the land.
“Volvo has made the strategic decision to be the world leader in electro-mobility. For Nova Bus, it means we want to be the No. 1 player in North America in mass transit. That’s our game plan.”
Things will now accelerate, he predicted.
“If you go back 10 years, our (bus) industry went through a technological evolution. Things changed in a prudent way, slowly.”
“But if you look out over the next eight to 10 years, it will be more of a revolution.”
“Gas prices aren’t coming down, traffic congestion is ridiculous, greenhouse gases are increasing, people are aging. So what governments, cities and transit commissions are looking for — demanding, actually — whether in Quebec or in North America, are hybrid vehicles, 60-per-cent electric vehicles, some buses bigger, others smaller, etc. What it all adds up to is a technological revolution.”
“The tipping point will come when you have no other choice but to make truly massive investments in public transport. So what Europe has known will hit North America with equivalent force.”
Empty city coffers all over North America have meant much-curtailed public transport expenditures, but Dion doesn’t worry that may delay the switch to lower emission buses.
“Pressure will build and make change unavoidable.”
Indeed, city-bus ridership did rise by 5.6 per cent in Canada last year, a multiple of the 1.2 per cent to 2 per cent anticipated. For Montreal the figure was an eye-popping 11-per-cent spike.
The Société de transport de Montréal and the other eight Quebec transit commissions have banded together for procurement and ordered 1,688 buses from Nova Bus for the next years — all, without exception, hybrid buses.
And STM spokesperson Isabelle Tremblay said the STM’s goal is to buy only zero-emission vehicles — buses, trolleys, tramways — as of 2025.
Theoretically, the steps along the road to carbon-free buses are clearly marked: from diesel-burning engines to bio-diesel to hybrid to pure electric.
But the current reality is that Nova Bus’s output is still about 80 per cent diesel powered — as is Montreal’s entire fleet of 1,800 buses, which runs on bio-diesel. And there are bound to be bumps along the road to a zero-emission fleet.
Still, hybrids are a big step along the way, cutting fuel consumption and greenhouse gas emissions by 30 per cent — big savings on the 50 million litres of diesel the STM burns annually.
Dion notes that “huge sums are available for R&D on electric vehicles,” some of which Quebec has already provided to Nova Bus.
“We have two (electric) units here on which we’re doing practical tests,” Dion said.
An electric-cell project is “very advanced” and should be out “by the end of 2014. It may not be 100 per cent electric, but for us, it’s a reality.”
But hybrid bus technology is no longer an issue — Nova Bus has sold between 300 and 400 of them, and many other companies also make them.
Nova Bus will stand on the podium for several reasons, Dion argues: some important manufacturers like Daimler Buses have decided to exit North America; Dion said he “likes to think that we helped Orion” a once large Mississauga-based bus maker, “to withdraw from the market”; Nova can rely on the global reach and resources of Volvo, whose Volvo Bus Corp. division is the world’s second-largest city-bus maker; and Quebec’s clean electricity will be a big selling point in sales pitches to transit commissions and cities all over the world.
“We’re not talking coal-fired electric plants here. Our buses are made with clean energy. How much greener can you get?”
Volvo has set up two R&D centres for future technologies, one in Asia and the other at St. Eustache. They will be virtual centres, a resource to bring together industry and academic know-how.
Nova Bus’s output this year should reach 700 units, about the same as last year. But Dion quickly notes that this year will include more articulated buses, which are equivalent to one and half-buses in size — and price.
The firm’s market share since Dion took the reins in 2004 has gone from 10 per cent to 50 per cent in Canada, a market of about 1,000 buses per year, and from zero to 9 per cent in the U.S., a market of 3,000 to 4,000 buses annually.
Jon Koffman, investor relations manager for New Flyer Industries Inc., Nova Bus’s only competitor in Canada, declined to answer queries about his Winnipeg-based company or the industry in general.
Nova Bus has sold hundreds of buses to U.S. cities, including Philadelphia, Houston, Austin and Hartford, Conn.
The Southeastern Pennsylvania Transportation Authority (SEPTA), for instance, has ordered 245 Nova Bus hybrid buses for $171 million U.S. over the next four years, part of the regular renewal of its 1,400-bus fleet, said spokesperson Andrew Busch.
In fact, Nova Bus displaced New Flyer, which had been SEPTA’s supplier since 2002, for price reasons — SEPTA is contractually bound to accept the lowest bid, Busch noted.
He illustrated Dion’s critical-mass argument that governments no longer have a choice, saying his commission could not have bought the Nova buses without aid from a federal program to promote cleaner transportation modes.
“The price for a hybrid goes up by about $100,000 for a conventional 40-foot bus ($550,000, up from $450,000 for diesel), and $150,000 for an articulated 60-footer ($650,000, compared to $500,000), so we had to get funding from Washington, which we got.”
The commission could not have afforded the buses otherwise, he said.
But the financing was only for the first 160 of the 245 buses that SEPTA will start receiving in about a month over the next two years.
“After that, we have to re-apply for the rest. But we’re confident we’ll get it.”
U.S. bus manufacturers Gillig LLC and Eldorado National did not return calls.
Mike Alexander, manager of capital projects for Saskatchewan’s Regina Transit is a true Nova Bus believer.
“We started dealing with them in 2005 after we went to tender, a bid they won,” Alexander said.
“Now about 70 per cent of our fleet (of 106 buses) is Nova Bus, plus eight more buses on order.”
“We’re finding that their newest (diesel) ones are giving us 13 per cent better fuel mileage over previous ones.”
“We haven’t ordered any hybrids because those shine when they have a big load factor and they stop and go all the time (as the braking action replenishes the electric battery). Here, our buses go four or five blocks before stopping, so we wouldn’t see the payback. And lots of people build hybrids.”
The firm’s $438,000 per bus is competitive, he said. But more importantly, they’re really good on after-service and warranty claims. These guys routinely drop in when we don’t ask.”
Dion said he foresees the day when Nova Bus might sell to Europe, and set his sights on cornering 20 per cent of the U.S. market.
“As one of Volvo’s most profitable bus operations, if not the most, I’m confident we’ll get there.”