Electric cars won’t save us, so what is the real key to decarbonizing road transportation?
Why we invested in a new way to travel.
Want to take a deep dive into electric buses first? Check out our public research.
A world dependent on cars
In Los Angeles, where the weather is sunny all year round, you’re unlikely to catch people enjoying the breeze as they cycle to work. You’re more likely to see lines of traffic jams, air-conditioned cars and - for those counting - 82 hours spent sitting in traffic, annually, estimated at 30 billion dollars in wasted time and fuel. As little as 3% of the LA population uses public transit regularly.
While we might look to LA as an extreme advert for car-centric living due to its unique urban planning and political and cultural history - across the pond, we are stuck to our cars too. In the United Kingdom, 75% of households own at least one car, and our dependence on personal vehicles comes at a heavy price–our climate and our health.
The true price of cars
We know transport emissions lead to climate change: 30% of all global carbon emissions come from transportation - with road vehicles (cars, vans, lorries, buses) contributing 72% of that. The average car contributes 4.6 tonnes of CO2 annually, adding up to around 3 billion tonnes of CO2 each year.
There are also issues with air quality. ‘Particulate matter’ from car exhaust can damage the lungs and get into the bloodstream, and Carbon monoxide (CO) affects critical organs like your heart and brain. Up to 95% of all urban Carbon Monoxide emissions are estimated to come from motor vehicle exhaust. Nitrogen dioxide - produced when fuel burns - impacts the respiratory system. The American Lung Association has warned those car-crazy LA citizens: “the air you breathe may put your health at risk”.
Electrifying vehicles holds some promise. Electric vehicle sales recently overtook diesel vehicles, and they’re getting cheaper. But they can’t solve everything. After all, the new models are still too expensive for most people to upgrade immediately, and the critical minerals we need to build enough batteries may be out of reach. If demand for EVs continues as projected, the US market alone will require three times the current global production of lithium by 2050.
Replacing the car
Even though we are well aware of the cost of car ownership, right now, if you want to travel from one city to another one - for work, to meet friends in another city or for a domestic holiday - you’re likely to opt for driving. So what can we do to keep people out of cars? Well, at the top of the climate-friendly list are coaches and buses (we’ll use those words interchangeably here as a ‘coach’ is defined differently in different countries).
Buses and coaches have consistently been an environmentally friendly way to travel, and new electric models are even more so. Electric buses always emit less CO2 than conventional diesel buses, even when the grid is powered by coal. When the grid is green, electric buses emit less CO2 than any other kind of bus, including various hybrid electric and biodiesel technologies.
Electric buses also put sustainable transportation in the hands of many more people than electric cars currently promise to. Just look at lithium. It is one of the key components of an electric vehicle battery, and it takes almost 22x more lithium to build 40 electric SUVs than one bus that can move 40 people. Instead of those 40 SUVs, that 960 kg of lithium could be used to build 22 electric buses that move 880 people. This comparison becomes even more extreme when you consider the lifetime usage of these vehicles, as a bus will likely travel many times further than a car during its lifetime of usage. A bus will easily travel 300,000 km per year, which is around what the average car will cover in its entire lifetime.
Compared to electric cars, electric buses have high utilization, which means they quickly become climate positive. In most cases, you have to drive over 20,000 km before the electric car becomes a better climate option than a gasoline car, and that number increases to around 125,000 km if your grid is powered by coal.
Rethinking the framework for buses
In social science, there is a concept called the “sunk-cost fallacy”, where people tend to stick with something when they have invested time and money, even if it would make more sense to give it up. Between sunken costs, worries over available charging infrastructure, and the complications of running a mixed fleet, many bus operators have been hesitant to make the switch over to electric. Fortunately, pressure from the regulatory side to move towards large vehicle electrification has expedited innovation. Just last week, the EU proposed stronger standards for the decarbonization of heavy-duty vehicles, including buses and coaches, aiming to reduce CO2 emissions by 45% from 2030 (currently 30%) and 90% from 2040.
The good news is that once the infrastructure is laid down, the operating costs of an electric bus are lower than diesel. Electric buses have fewer moving parts, and that means the maintenance costs are lower and more predictable than with diesel buses, plus no need to refuel with expensive diesel.
Building a better experience for the coach and bus market is a huge opportunity, so we are very excited to announce our investment in Ember. They’re a ‘full stack’ electric coach service - reimagining the bus network from scratch. They’re buying vehicles, building an operating system to run the network, and they’re setting up charging infrastructure that’s fit for electric buses. Their network of fast chargers allows the buses to run 24/7.
Ember is radically reimagining what shared transport means. They are designing everything from scratch and specifically around the capabilities of electric buses. This means strategically placing charging hubs rather than relying on existing EV infrastructure or pre-existing route networks. Their focus market is up to 200 km trips between towns and cities, and they have seamless integration into last-mile connections. Ember is also improving journey time for its passengers by being demand-responsive and dynamically re-routing buses to only go to stops where someone is waiting. And the buses themselves have built excellent word-of-mouth popularity for being fast, convenient, comfortable, and even for having great onboard WiFi.
It’s not just the passengers that love Ember; they are also loved by drivers. They have revamped the experience for bus drivers by building a full-stack operating system that not only seamlessly integrates the buses and the battery data but also offers driver support, scheduling, communication, fleet management and customer-facing applications for real-time data and tickets.
What’s next for Ember
With their full stack integration, and continuous software-based improvements, we were fired up by Ember’s vision from the start, and we weren’t the only ones. We co-lead this round with Contrarian Ventures and are joined by experts in energy storage and travel, including the founders of Monzo, Zenobe, and Skyscanner.
Today the Ember team is showing strong results with impressive unit economics and profit margins, and their ridership continues to grow. From a small team that started with two buses, they are now serving 40,000 trips every month across more than 20 destinations. They are also hard at work developing their software stack for ticketing, driver support, scheduling, and charging optimization.
Keith and Pierce, the co-founders of Ember, know the economics of electric buses only make sense when you own the infrastructure, have a long-term vision, and are willing to go the whole way. Small, disjointed solutions won’t make a dent - but offering a comprehensive solution will. Ember is set to build up a comprehensive network over the next two years, before opening up zero-emission travel across the UK. This is an important mission, and we can’t wait to support them in getting there.
Want to know more? Check out our public research on electric buses.
Great read and an exciting business - congrats!
great article and seems like a great investment. Congrats!