Battery contract helps to drive business
The order for 200 hybrid buses received in September this year for the Colombian capital, Bogotá, represents yet another major success in Volvo Buses’ global commitment to electromobility.
Bogotá is well advanced in the development of long-term sustainable public transport and Volvo’s hybrid buses are a good fit with that strategy. To accelerate the development programme, operators prepared to invest in hybrid buses are provided with a certain level of financial support by the authorities.
However, persuading the operators to commit to a new, and for them unknown, technology was not completely straightforward, despite the extremely low fuel consumption and favourable environmental performance of the hybrid:
“Customers also need to have confidence in the long-term reliability of their chosen solution. They are absolutely unwilling to risk the kind of surprises that may involve unplanned downtime or unexpected costs,” explains Euclides Castro, Urban Bus Manager of Volvo Bus Latin America.
To solve that problem, Volvo Bus Latin America has adopted a business model in which Volvo undertakes all maintenance of the buses at a fixed, predetermined cost per kilometre. Volvo’s battery contract is an important part of the total offer.
“We don’t sell batteries. What we do sell is electric energy on a per-kilometre basis while guaranteeing the operator that the batteries will perform as intended throughout the contract period.”
Of the 200 hybrid buses on order for Bogotá, 156 were bought by Consortium Express.
”We have been collaborating with Volvo for 14 years and we have great trust in the brand. And the fact that Volvo was offering fast delivery of the chassis, together with a battery performance guarantee, was crucial to our decision,” comments Andres Jaramillo Boterro, CEO of Consortium Express.
The arrangement is a win-win situation for all concerned. The customer’s electric energy running costs are more than offset by the lower fuel consumption of the hybrid. Finally, the contract provides Volvo with a small, but fixed, monthly revenue.
“The Bogotá hybrids are being supplied with a 12-year hybrid battery contract covering the complete battery life cycle. Volvo – which owns the batteries – will recover them at the end of their useful life and ensure that they are recycled in an environmentally correct manner. So the customer has no worries in that regard either,” says Euclides Castro.
“This is definitely a business model for the future. It enables us to bring new technology to the market more quickly, while affording the customer full control of his costs and enabling him to focus in confidence on his core business.”