BOW VALLEY – A claim of $3.6 million has been made by the Bow Valley Regional Transit Services Commission (BVRTSC) for electric batteries with its Proterra electric fleet.
The claim is for battery replacements for nine buses – each having six batteries – where contracts have been cancelled due to Proterra’s bankruptcy and purchase by Phoenix Motorcars Inc.
Martin Bean, BVRTSC’s CEO, said the claim is out of caution with the battery replacement warranty contract having been cancelled with Proterra’s bankruptcy and resale.
“We’ve been told a number of the batteries will go for at least the 12-year life of the bus, but some may need replacing,” he said. “Some batteries may not need replacing during the life of the bus.”
The battery replacements aren’t expected to be needed in the immediate future, Bean said, since all Proterra buses have only joined Roam’s service in the last three years.
When the Proterra buses were purchased, they came with a 12-year warranty with unlimited kilometres and offered a replacement for each one.
When Phoenix Motorcars Inc. purchased Proterra, it rejected several contracts as part of the sale. The transit commission’s claim is against Proterra.
The commission’s board made an email vote to submit before the March 7 deadline, which will see more than two dozen transit agencies and companies make a claim.
Proterra filed for bankruptcy Aug. 7, 2023, and Phoenix Motor Inc. agreed to buy it and its assets on Jan. 8. However, Proterra filed a motion to reject certain executory contracts, which included the transit commission. It meant the warranty obligations wouldn’t be assumed by Phoenix Motor Inc. and wouldn’t be fulfilled.
“As a result, the purchase orders and the contract pursuant to which the purchase orders were issued are at an end, and Bow Valley can no longer be able to rely on the warranty or any of large upcoming obligations thereunder, like the full-scale battery replacement,” stated Roam transit’s claim.
Bean said they were advised to put forward a claim, but it’s unknown if it will be successful or what the timeline will be for hearing back.
He noted they’ve been in contact with Phoenix Motorcars Inc., which is in the process of getting a Canadian business licence potentially before the end of March. Phoenix Motorcars Inc. is also in negotiations with Proterra suppliers who aren’t shipping parts until there’s a new agreement, which requires a Canadian business licence.
“Since that time, we’ve been waiting to find out how much support we’ll get from the new organization as they start making buses again and servicing customers. We’re in pretty close communication with them,” Bean said.
He added there are three Proterra buses out of service waiting for parts. Roam bought three Proterra buses in 2021 and two more in each of 2022 and 2023. They purchased through an onboarding contract with the City of Edmonton.
The City of Edmonton also filed a claim for damages of $82 million earlier this year after it ordered 60 electric buses in 2020.
The transit commission was expecting one final bus from Proterra, which was meant for the three-year pilot route at Grassi Lakes that is set to begin this year. It was originally meant to arrive in April, then pushed back to at least the summer, but was delayed until 2025 pending bankruptcy proceedings.
The California-based company was founded in 2004 and primarily serves American companies and transit services, but has Canadian customers in the City of Edmonton, BC Transit and Toronto Transit Commission (TTC).
U.S. Volvo Group announced it was buying Proterra’s battery business, including electric drivetrain and vehicle-electrification business units, with the transaction expected to close in early 2024 if the American courts approve the deal. The American branch of the Swedish-based company was selected as the winning bidder in an auction in November for $210 million USD. The assets being acquired are a battery module development centre in California and an assembly factory in South Carolina.
The U.S. bankruptcy court gave final approval for the sale on Nov. 29 and the closing date is expected in the first quarter of 2024.
Phoenix Motorcars Inc., a California-based company specializing in electric shuttles and school buses, offered to purchase Proterra’s transit business line for $10 million.
Cowan Equity, a financial backer of Proterra based in Toronto, bought the company’s energy business line such as charging infrastructure for an undisclosed amount. The sale is going through a Chapter 11 reorganization when Proterra exits bankruptcy.
Proterra had sold roughly 1,300 buses to more than 130 transit agencies in America and Canada.
The electric buses have a range of 350 kilometres per battery charge, with battery life being 12 years. In the summer, they drive a full 18 hours before needing a recharge, while in winter it’s 12-13 hours.
The Route 3 Banff-Canmore regional bus travels about 800 km each day, while local routes often do about 200 km. The regional routes are largely served by diesel buses due to range, but electric bus capacity diminishes on highway travel.
With no specific bus-related maintenance companies in the Bow Valley, Roam’s fleet has to go to Calgary when significant repairs are needed.
Prevost Parts and Service can look after Nova buses, while Big Rig Collision looks after structural and frame repairs and Cummins Sales and Service completes engine work.
Roam had its highest-ever ridership in 2023, with more than two million people taking public transit. On Banff local routes, there were more than one million riders in mid-August and as of Sept. 24, there were 1.25 million riders.
Bean said the aim is to get the three buses up and running in time for the busy summer season, but they’re looking at outsourcing some work and possibly leasing or purchasing smaller buses in the interim.
“They’re run well. We’ve had challenges learning about the difference between winter and summer as far as range and we’ve been able to work through those partially because we’re a little slower in winter than summer so we have additional buses we can switch out,” he said. “Our biggest challenge on the Proterra side has been with the bankruptcy and the unknown and the inability for some suppliers to ship parts.”
