New Flyer, a major player in the North American transit bus market, is facing challenges due to its focus on hydrogen fuel cell buses. This strategic approach may result in a loss of market share as hydrogen buses are more expensive to purchase and maintain, and less reliable compared to battery-electric buses.
The preference for battery-electric buses is evident globally, with over 600,000 operational battery-electric buses compared to fewer than 10,000 hydrogen fuel cell buses. This trend is particularly prominent in China, where battery-electric solutions have consistently been favored.
Despite government subsidies for hydrogen initiatives, transit agencies are shifting away from hydrogen in favor of battery-electric systems due to practical outcomes. A recent study by CUTRIC, in which New Flyer is involved, has been criticized for flawed analysis regarding the cost-effectiveness of hydrogen versus battery-electric buses. The study failed to conduct a comprehensive cost-benefit analysis and neglected to consider Canada's carbon pricing on emissions associated with hydrogen production. This raises concerns about CUTRIC's credibility as an advisor on transit decarbonization.
New Flyer's strategy of focusing on hydrogen fuel cell buses may lead to operational challenges and dissatisfaction among transit agencies, potentially questioning the company's decision to promote an inferior product at a higher price. Government subsidies for hydrogen initiatives may not compensate for the higher maintenance costs and service disruptions associated with hydrogen technology.
Battery-electric buses are emerging as the frontrunners in the transit industry due to decreasing battery costs and improved technology, while hydrogen buses are struggling to gain traction. New Flyer's reliance on hydrogen technology, despite its track record of failures, could hinder its competitiveness in a market that is embracing battery-electric systems. The company must reassess its strategic direction to align with the prevailing trends in the industry.