School Districts Revert to Diesel Buses as Poor Performance Restricts Electric Bus Usage and Bankruptcies Affect Service

Schools are returning to diesel buses because electric bus companies are going out of business and cannot service the vehicles that they had manufactured. Canadian electric bus maker Lion Electric, which received $159 million in federal funds to manufacture 435 school buses between 2022 and 2024, has filed for bankruptcy. The company failed to deliver $95 million worth of electric buses and told school districts that it could not service their electric buses, which are under warranty. The $95 million worth of electric buses it pledged to produce is part of the Biden administration’s $5 billion Clean School Bus program.

According to the Washington Free Beacon, during bankruptcy proceedings, Lion was sold for just $6 million after being valued at $4.7 billion in June of 2021. The company also permanently closed multiple manufacturing plants, fired the majority of its employees, and told consumers that it could no longer honor warranties and purchase orders in the United States.

As the Free Beacon explains, electric buses are extremely expensive, costing more than $350,000 on average, whereas new diesel-powered buses typically cost around $100,000. They also require school districts to invest in high-powered charging infrastructure and new training for drivers. The Free Beacon cites a report from Clean Trucking, which discusses some of the issues schools found with electric buses, including that they were not of comparable quality to diesel buses in that they would not heat up in cold weather, lost steering and braking ability at times, had defective frames, and regularly displayed error messages that forced drivers to reset the vehicles. In one school district, a bus lost its brakes and ran into a snowbank during its first year in operation. The districts also found that they needed repair after operating for a month or less. The electric school buses have spent months in repair shops, faced parts recalls, and failed state inspections.

Lion sold about 3,400 electric buses in the United States — buses that had warranties. In July, its new investors notified school districts that they would no longer honor warranties. School districts with Lion electric buses now have no recourse for repairs — which are needed as the buses start failing after two weeks of operation — just as the new school year starts. Some other bus companies are offering to service the vehicles, but at an extra cost.

One school district found that its electric buses were operational for a total of one month over two years. These failures limit the district’s options to selling the buses, trading them in, or working with another service provider and repairing the buses, which involves higher maintenance costs.

School districts that obtained their electric buses through a grant from the Environmental Protection Agency (EPA) are required to keep and maintain the buses for five years, which means that they will incur higher maintenance costs unless the EPA waives the requirement. They also want the EPA to tell them how to dispose of their buses.

Electric Bus Maker Proterra Also Filed for Bankruptcy Protection

Proterra, an electric bus manufacturing company promoted by former President Biden, former Vice President Harris, and former Transportation Secretary Buttigieg, and heavily invested in by Biden’s Energy Secretary Granholm, filed for bankruptcy protection in 2023. Proterra had sold more than 1,300 electric buses to public transit systems in the United States and Canada. The company sold pricey electric buses and had poor performance reviews from a number of U.S. cities. In 2024, Phoenix Motor officially acquired Proterra’s electric bus business, supplementing Phoenix’s product line of medium-duty electric buses with Proterra Transit’s heavy-duty electric transit buses.

Post Office EV Program in Trouble

In December 2022, the Biden-⁠Harris administration announced that the U.S. Postal Service (USPS) would be investing $9.6 billion to put the fleet of Next Generation Delivery Vehicles on the road, with $3 billion in funding coming from the Inflation Reduction Act. The intention was to put 66,000 new battery electric delivery vehicles on the road by 2028, but only about 250 electric vehicles have been produced thus far amid delays, defective trucks, and skyrocketing costs. The GOP wants to cancel the initiative and give the money back to taxpayers. However, in June, the Senate parliamentarian rejected a component in the One Big Beautiful Bill Act that would have required the USPS to sell off the new electric vehicles and revoked the remainder of the money. Congressman Michael Cloud and Senator Joni Ernst have introduced the Return to Sender Act, which would take back the $3 billion in taxpayer money.

Analysis

Another electric bus maker has filed for bankruptcy. Canada’s Lion Electric received $159 million in federal funds from Biden’s Clean School Bus Program to manufacture 435 school buses between 2022 and 2024, but failed to deliver $95 million worth of electric buses and told school districts that it would not service their electric buses that are under warranty. Bankruptcies, poor manufacturing output, quality issues, and poor operational performance are plaguing electric bus companies. Clearly, they are not ready for prime time.

For inquiries, please contact [email protected].