Green power: FirstGroup partners with Hitachi to lease 1,000 electric bus batteries
The Aberdeen-headquartered group said the strategic partnership would help it meet its ambitious 2035 decarbonisation target for its vast bus fleet. Under the tie-up, a newly formed 50:50 joint venture will purchase up to 1,000 electric bus batteries valued at some £100 million, as part of First Bus’s expanding electric bus fleet.
There will be an option for the group to participate, via a small minority interest, in future value creation through the deployment of Hitachi ZeroCarbon’s products to commercial fleet operators worldwide. First will retain 75 per cent of the residual value of the batteries at the end of its bus fleet’s useful life, offering “material second life value opportunities” given that much of the battery’s capacity remains.
Graham Sutherland, FirstGroup’s chief executive, said: “The pioneering alliance with Hitachi is a major strategic partnership for the group as we progress towards our ambitious 2035 decarbonisation target for our bus fleet. It will allow us to continue the electrification of our fleet and depots with increased efficiency and greater visibility of our financial commitment, and unlike other possible arrangements, we will retain much of the residual value in the batteries as they are taken off our buses.
“Looking ahead, we are also excited about the possibilities for future value creation as Hitachi ZeroCarbon delivers market leading decarbonisation solutions to transport operators worldwide, leveraging our joint experience.”
The group said the partnership with Hitachi for the electrification of its bus fleet builds on the existing “strong relationship” that it has with the industrial giant in its First Rail division. It is anticipated that the first 400 of the 1,000 batteries will be deployed to First Bus in the 2024 financial year.
Alistair Dormer of Hitachi added: “Hitachi is committed to becoming a climate change innovator. We continuously strive for growth through collaboration and co-creation with our partners and customers, and this specific partnership enables us to use our innovative technologies and global expertise to help decarbonise fleets efficiently, discover untapped revenue streams and maximise the residual value of assets.”
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