Proterra to Lease Electric Bus Batteries

California-based electric busmaker Proterra Inc. is partnering with Japanese investment firm Mitsui & Co. to create a $200 million fund to support a battery leasing program.

Under the scheme, customers lease batteries separately from the purchase of the bus. This lowers upfront costs to make the price of an electric bus comparable to that of a diesel- or CNG-powered model, according to Proterra.

To help decrease risk, the busmaker guarantees the performance of the batteries through the expected 12-year life of a bus. The battery pack is replaced at no additional charge after six years.

Proterra and Mitsui also have created a program to use leased batteries in secondary applications after the end of their useful life in a vehicle. Separately, Proterra also has started a leasing program for electric buses to further reduce monthly payments.

Battery leasing programs were authorized in the U.S. under the 2015 Fixing America’s Surface Transportation Act.