*5.3. TCO with Future Cost Levels*

Since electric buses are new products, their cost is still high. Once they are produced in high volumes, the cost of an electric bus, excluding the battery, is likely to be the same as for a conventional bus. This means that the cost of the electric powertrain is assumed to be the same as the cost of a diesel powertrain. Furthermore, increasing production volumes of batteries for cars has led to rapidly falling battery prices, and it is likely that the cost of power-optimized batteries for buses can fall to about 2500 SEK/kWh and to 1500 SEK/kWh for energy-optimized batteries. The TCO for our compared bus types under these assumptions are shown in Figure 15, which reveals that electric buses might have a lower TCO than conventional diesel buses that are powered by HVO (or diesel).

**Figure 15.** The cost per km for end-stop-charged and biogas (CBG) buses with cost parameters estimated for high production volumes. (Note that the *y*-axis starts at 18 SEK/km, so the driver cost is more than half the TCO).

The TCO in Figure 15 is not a lower limit for electric buses. There are at least three more ways in which the cost may be further reduced. The service life of an electric bus is likely to be longer than that of a combustion engine bus, due to less vibrations and fewer parts that can be worn out. The service life of the battery is also likely to increase, as it is currently extensively researched by universities and companies globally due to the high economic value in such improvements. Finally, the maintenance cost can be expected to become lower for electric buses than for combustion engine buses. When these improvements also occur, electric buses are likely to become even cheaper than conventional buses. Looking at the size of the different parts in the TCO bar-chart, it can be seen that even though the battery is often said to be a very expensive part, an increase in the service life of electric buses and a reduction in the maintenance cost may be just as important for reducing the TCO as future reductions of battery prices.
