UK’S £400m electric bus scheme is subsidising China, say bosses

A £400m scheme set up to encourage the roll-out of electric buses is in effect subsidising Chinese companies to the detriment of British ones, a group of transport businesses have claimed.

Under the so-called Zebra initiative, local authorities and bus operators can apply for grant funding to support the purchase of zero-emission buses. It is part of the “bus back better” plan unveiled by the Government during the pandemic and aims to finance the purchase of 4,000 buses, accounting for around one-tenth of Britain’s total fleet.

But some companies have complained that the bidding rules exclude projects to convert existing petrol or diesel-fuelled buses into electric ones – while aiding purchases of vehicles that depend on Chinese manufacturers.

Businesses such as Sheffield-based Magtec, Kleanbus in Scarborough and Equipmake in Norfolk, argue that converting existing diesel buses – a method known as “repowering” – is a greener alternative than buying new vehicles.

But they claim the Government’s grant scheme currently incentivises new bus purchases instead of repowering, in effect distorting the market.

Currently, 70pc of electric buses purchased in the UK are Chinese-manufactured or have components made in China, such as batteries, according to an analysis of official figures by Magtec.

The most common bus model registered in Britain is the Enviro bus, built by Shenzhen-based BYD. But Magtec and others said operators and local authorities should also be allowed to receive grant funding for repowering.

Marcus Jenkins, founder of Magtec, said: “At the current rate, it will take more than 30 years to replace the diesel fleet with zero-emission buses. Will the Government continue to pump taxpayers’ money into buying new zero-emission buses mainly from China, or will it take a more sensible approach?” The Government said it “did not recognise” the claim that the Zebra scheme was subsidising Chinese manufacturers.

A spokesman added: “Over 80pc of buses operating in our towns and cities are produced in the UK and British manufacturers make up more than half of buses ordered through our zeroemission buses scheme.”