In January 2021, I started a position with Blue Bird Corp (BLBD), intending to find an auto manufacturer with a differentiated customer base and a firm legacy name. “The firm can be traced to the Houston County Motor Co., a small Georgia Ford distributor founded in 1920 by Illinois native Albert L. Luce” . In 1927, Mr. Luce mounted a sturdy steel body over a 1927 Ford Model T chassis to be sold to Mr. Frank Slade of Marshallville, Georgia, “who used it to transport children to and from a rural school” . Schools are essential institutions working tirelessly to educate and cultivate future minds that would shape the world we inhabit. If the world we inhabit is supposed to be a combustion-engineless ecosystem, applying alternative fuels in school transportation is essential. In an essay titled, Electric Mobility: Pupil Edition, I try to present the argument for the overall adoption of alternative fuels in student transportation for economic and sustainable reasons.
The essay features a brief excerpt regarding adopting alternative fuels and electrification in school buses using statements made by the CEO of Blue Bird Corp (BLBD), Phil Horlock.
In their 2020 Fourth Quarter report, Mr. Horlock stated, “We saw substantial growth in our electric-powered bus sales this year, with 158 buses sold and a strong growth runway in that segment. Our alternative-fuel market share remained strong in fiscal 2020, led by propane at 76%, followed by electric at 58%, and we maintained our position as the undisputed leader in alternative fuels” . In my opinion, Blue Bird Co (BLBD) is an enabler, helping society and its participants move forward towards greener transportation in the public domain.
Nation-states such as South Korea or Germany can gleam in reverence for their public transportation infrastructure’s rapid transformation to accommodate their respective populous. America does not share the same need for public transportation as Korea or Germany because of its extensive road networks and, quite frankly, its size. In my opinion, the school bus relates to public transport for the average American family more than the AMTRAK bus service. The school bus’s convenience allows for generations to access education and other amenities to grow in their lives.
An argument presented for the slow adoption of electric vehicles is range anxiety. In Got an Electric Car? Great! Where Do You Plug It In?, author Elaine S. Povich, “It’s the electric vehicle equivalent of driving a traditional car on an isolated country road with the gas gauge hovering near empty” . Ms. Povich highlights that there is disproportionality in charging stations to support electric vehicles’ complete adoption on a consumer level. According to Ms. Povich, Massachusetts has a vehicle to public charger ratio of 13 to 1 compared to New Jersey, which stands at 35 to 1 .
According to the Alternative Fuels Data Center, there are approximately 40,000 public charging stations, with California having 12,000 stations and states like New York, Texas, and Florida individually hosting around 2000 sites, respectively . (Click here to see how many are in your state.)
In research presented by National Renewable Energy Laboratory, the average school bus is typically in operation for “5.26 hours out of standard 8-hour work day,” and “that on average school buses travel 73.46 miles with 99.7% cutoff driving distance of 154.46 miles” . School buses do not travel across long distances across highways but cover a majority of short distances within a specific area. In essence, electric school buses offer a fiscally viable alternative to operators.
Two specific attributes presented by Blue Bird Co (BLBD) on their website attracted my attention: V2G Technology and 120 miles range per charge, which takes about 3 hours . The latter provides a range above the average mileage presented by the National Renewable Energy Laboratory, whereas the former offers a societal innovation. According to Blue Bird Co (BLBD), V2G stands for Vehicle to Grid, and it “creates opportunities for energy companies to “buy back” stored energy that the buses are holding after a charge as well as charge at off peak times when power is less expensive” . Instead of accepting a school bus as a simple mode of transportation, it can be received as a financial asset on a state and local level if used appropriately.
Suppose we accept that as we advance, electric vehicles are a staple; why not use them effectively to contribute to the electric grid positively, as reflected by Georgia Gov. Nathan Deal in 2016 when the Department of Energy awarded the most considerable amount, $4.4 Million of the available $15 Million to Blue Bird Co (BLBD) in order, “to accelerate the adoption of advanced and alternative fuel vehicles” . Gov. Deal stated, “The development of a low-cost electric school bus is an investment that could save state resources in the long term. We are excited to see Blue Bird develop this new technology here in Georgia” . Electrification of school buses seems to be an economic decision on both the climate and fiscal challenges addressed by local and state governments.
A further application could be the transmission of internet services using school buses. There is a considerable lag in rural and urban internet access in various states. According to the FCC Broadband Map, approximately 92% of the states have three or more broadband providers, with Hawaii, Alaska, Mississippi, Arkansas, New Mexico, and South Carolina exhibiting more than 30 basis point difference between urban and rural broadband providers . Internet and electricity are two critical components of modern society, and looking at school buses with a singular purpose would be counterintuitive.
In their most recent 10-Q filing dated 01/02/2021, Blue Bird Co (BLBD) shows a decline in sales for diesel buses (-22%) but shows a year over year increase in alternative fuel buses(+1%) . In their earnings call, Mr.Horlock highlighted the demand for electric buses with their Fiscal 2021 bookings with a 24% growth in backlogs, year over year, and optimism with school openings .
I chose Blue Bird Co (BLBD) for its brand value, history, and innovation. I am not of the camp that believes that schools will transform into virtual spaces accessible only from home. Schools are institutions that work tirelessly to educate and cultivate future generations into becoming social citizens. Infrastructure spending to build fiscally viable opportunities is very important at a state and local level, causing an inclination that Blue Bird Co (BLBD) will be an important change actor. There are other school bus manufacturers like Collins (REVG) and Thomas Built (Daimler AG), but I went with Blue Bird Co (BLBD) because it just makes sense.