Electric Bus Startup Proterra Up Against China
You’re either on the bus or off the bus. That was the bare-bones philosophy of Ken Kesey and the Merry Pranksters, a misfit band of hippies and revolutionaries best known for spiking the punch with LSD at Grateful Dead gigs back in the 1960s. Driven with manic glee by Jack Kerouac’s old drinking buddy, Neal Cassady, their bus “Furthur” ferried the Pranksters on their mission to transform the consciousness of a square America. You might say they were some of the early disruptors out of Silicon Valley before it became Silicon Valley. Today’s entrepreneurs are also attempting to rewire human society, but their drug of choice is technology. One of the biggest disruptions will be electric and autonomous vehicles. More than 40 companies, at last count, are working to develop driverless cars, and just about every automaker has churned out an electric and/or hybrid model. More and more are manufacturing electric buses, though few are doing it on a scale like Silicon Valley-based Proterra. Unless you count China’s biggest electric vehicle (EV) manufacturer.
We first introduced you to electric bus startup Proterra in January 2014 when the company had raised $34 million. Fast forward almost four years and Proterra has now taken in about $372 million. Frankly, we had been expecting to be telling you all about the company’s upcoming IPO right about now, as Proterra CEO Ryan Popple had promised to go public by the end of 2017 or early 2018 after taking in $140 million in January of this year. He even said the company wasn’t looking for any more venture capital. Of course, such pledges are about as reliable as baby-kissing-candidates making campaign promises. Instead, the company nabbed another $55 million in June that included investors like BMW and, speaking of politicians, Al Gore’s Generation Investment Management LLC.
On the Electric Bus
There are still plenty of reasons to be bullish on Proterra, which has amassed one of the biggest war chests of any electric bus startup that we know of since its founding in 2004. Let’s start with a record-breaking range test in September that saw its Catalyst E2 max, sporting a new DuoPower drivetrain, roll 1,101 miles on a single charge, beating the old record held by an experimental passenger vehicle out of Germany, which is about 46 times lighter than Proterra’s electric bus. The company claims its latest and greatest drivetrain is five times more efficient than a standard diesel bus and is 20 percent more efficient than its older ProDrive system. It has sold more than 400 vehicles, which are manufactured in Greenville, S.C. and the company’s new facility in Walnut, Calif. Each electric bus retails for somewhere in the neighborhood of three-quarters of a million dollars and the company has its vehicles in 20 states operating with a range of about 350 miles.
The new DuoPower drivetrain features two electric motors capable of delivering 510 horsepower. That’s enough oomph to accelerate the 40-foot bus from 0 to 20 miles per hour in 4.5 seconds and power it up 26 percent inclines, something your standard diesel bus simply can’t do. It has a nominal range of 426 miles on a single charge, which far exceeds the average distance of North American transit routes, according to the company.
Of course, Proterra isn’t the only one working on electric buses. We previously turned you on to five other startups building out similar tech (though a couple were little more than fancy golf carts) but with an added feature of the future: autonomous driving. Proterra is not being left behind. Wired reported earlier this year that the University of Nevada in Reno, along with local government agencies, has partnered with Proterra on an autonomous electric bus. The first phase of the project was supposed to begin this past summer, with the hope to have a driverless bus cruising the streets of Reno by 2019.
Off the Electric Bus in China
However, Proterra can’t afford to keep it on cruise control. A Chinese company called BYD, for Build Your Dreams, manufactures electric buses in Lancaster, California, and just announced expansion plans that will allow it to produce up to 1,500 electric buses per year. Founded in 1995 and based in Shenzhen, BYD builds everything from electric cars and electric trucks to battery packs and LED lighting systems. It’s particularly well known for its battery technology, and its iron-phosphate EV battery is capable of being used for up to 30 years. The publicly traded company (SHE:002594) hit the United States a few years ago and is reputedly the biggest EV manufacturer in the world (sorry Tesla fanboys).
Another big reason to like BYD: Warren Buffett. MidAmerican Energy, controlled by Buffett’s holding company Berkshire Hathaway, sunk about $230 million into BYD nearly 10 years ago when the world economy was in a nosedive. Today that stake is worth about $1.9 billion, according to a story in Quartz, with the company’s stock price up 60 percent for the year as of last month.
The other big reason to bet on BYD: China. China is far and away the biggest market for electric vehicles, according to the International Energy Agency. In 2016, it accounted for more than 40 percent of the electric cars sold in the world. “With more than 200 million electric two-wheelers and more than 300,000 electric buses, China is by far the global leader in the electrification of transport,” IEA reported. So far, no word about BYD taking the autonomous vehicle route. Yet.
At least four countries—Britain, France, India and Norway—have pledged to go all-electric in the next 15 years to 25 years. Nearly another dozen nations, as well as numerous cities, have set ambitious goals for EV sales. Add in the densification and smart-ification of cities, where we imagine some public bus routes will mirror an Uber-like model of on-demand pickup, and the autonomous electric bus industry would seem to be a sure bet. We’re definitely on the bus. We’re just not sure if it will be made in the USA or China.
Update 9/19/2018: Proterra just raised another $155 million funding round with Daimler as a lead investor. This brings their total funding to just over $627 million. More than 70% of that funding was taken in during 2017/2018.
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