Iain Ballentine: firm trailed in rush for electric buses,
Wrightbus has been caught in the globally disruptive move to electric buses. Despite its proven capabilities in the production and design of urban buses, it ultimately had no bus ready to compete in this new and exploding market.
Wrightbus’ key competitor, Alexander Dennis (sold in May this year to NFI Group of North America for £295m) has had a joint venture with giant Chinese battery and electric vehicle manufacturer BYD since 2015. During that time, from a standing start, it has developed, trialled and brought to full production a range of fully electric buses which are currently running on several high frequency London bus routes, in both single and double deck formats — the Enviro200EV and Enviro400EV.
Electric buses, while slightly more costly to produce, have a significantly lower lifetime cost of operation. This is due to electricity being far less expensive than diesel. Regenerative braking technologies allow batteries to re-charge going downhill, reducing brake wear and tear and dust.
These economics, added to the fact that pollution-free city buses are seen by city administrations as vote winners, have led to a rapid uptake.
Faced with these factors, all city transport planners — in the UK and globally — are now looking towards a fully electric bus future.
As Alexander Dennis/BYD have rapidly ramped up electric bus production, Wrightbus has stuck mainly with conventional diesel and diesel hybrid powered buses, with no competitive response to the Enviro EV family. Wrightbus has been unfortunate not to have forged a relationship with a company such as BYD.
To create a competitive electric bus it needs to access to the vital electric components: battery pack, electric motors and software at competitive prices.
It also requires the engineering knowledge of how to integrate these parts into its bus architecture and manufacturing processes. It is both a supply chain and a know-how challenge, and not one that a relatively small bus maker can tackle alone.
Chinese companies lead the world in electric bus production. None has had the global impact of BYD, which is backed by Warren Buffett and has factories across Europe and North America.
However, there are several companies in China with the supply chain and expertise which could fit with Wrightbus, subject to their batteries meeting European safety and environmental standards.
European and Korean firms such as Volvo and Hyundai are getting established in the market but have some catching up to do.
As Wrightbus enters administration, it retains some highly impressive capabilities, notably its expertise in coach building and engineering, its workforce, and its detailed knowledge of the UK market.
What it needs now is a partner or owner who can supply it with the parts and expertise necessary to produce the compelling electric buses of the 2020s.
Here’s hoping that all involved can find a way forward.
Iain Ballentine is a chartered accountant and early retail investor in electric car pioneer Tesla