Winnipeg is facing a dilemma that could have negative consequences for New Flyer, a major bus manufacturer in North America.
The city's close relationship with New Flyer has influenced decisions that may lead to the company's potential bankruptcy. New Flyer has shifted its focus to hydrogen fuel cell buses, a move that has raised concerns among industry observers. While the Canadian government's Zero Emission Transit Fund supports this shift, it comes with risks.
Each hydrogen bus sold by New Flyer means three potential sales of battery-electric buses are lost to competitors, particularly from China. This not only threatens New Flyer's market share but also raises doubts about the long-term viability of hydrogen technology in public transit.
The decision to prioritize hydrogen buses over battery-electric buses has been criticized as a strategic mistake driven by short-term financial gains. New Flyer's monopoly as the sole hydrogen bus manufacturer in Canada allows them to set prices without competition. However, transit agencies are forced to invest in a more expensive and less reliable technology.
This dissatisfaction among transit agencies could lead to a decline in New Flyer's customer base. The company's desperation, stemming from a near-bankruptcy situation in the past, has led to decisions that prioritize short-term gains over long-term sustainability. This is further exacerbated by the competition from companies like BYD, which offer more affordable and efficient battery-electric buses.
There are concerns about conflicts of interest and flawed studies in the transit industry. The Canadian Urban Transit Research and Innovation Consortium (CUTRIC), which plays a significant role in the transit landscape, has a board that includes firms benefiting from the promotion of hydrogen technology. This conflict of interest raises questions about the integrity of the studies produced by CUTRIC.
Transit agencies are compelled to rely on potentially inaccurate assessments that favor hydrogen buses due to the financial incentives provided by the Zero Emission Transit Fund. This leads to poor decision-making and unnecessary expenditures on hydrogen infrastructure and vehicles, while the promised environmental benefits may not be realized.
Winnipeg's close relationship with New Flyer has made it vulnerable to the risks associated with the company's transit strategy. The city has purchased hydrogen buses without seeking independent studies, relying solely on New Flyer's recommendations. This has resulted in cost overruns and delays in the delivery of both hydrogen and battery-electric buses.
The city's reliance on New Flyer has created a situation where it is locked into a partnership that may not be in its best interests. The financial strain on New Flyer, coupled with the operational challenges of hydrogen technology, could leave the city without reliable bus services. This highlights the dangers of relying on a single supplier for critical infrastructure and the need for a more balanced and sustainable approach to public transportation.