Britain’s transport operator FirstGroup is forming an alliance with Japan’s Hitachi to lease up to 1,000 electric bus batteries for about 100 million pounds. The product of the 50-50 alliance between the two companies, NextGen AssetCo, will purchase the batteries, which will then be leased to the electric buses of FirstGroup’s First Bus division over a period of eight years, which can be further extended by two years. The move is a part of sustainable fleet expansion exercise in order to accelerate the UK’s electric mobility.
Financial targets
FirstGroup expects the partnership to contribute about three million pounds per annum to the group adjusted earnings by fiscal year 2026 before any potential operational benefits. It expects about 20 million pounds in savings in the 2024 financial year’s capital expenditure, along with future savings of about 40 million pounds to the 2027 fiscal.
Battery charging and management services
Under the agreement, Hitachi ZeroCarbon will provide battery charging and management services for 1,000 electric buses powered by the new batteries. It will further provide a commitment of 500 vehicles beyond FY 2026. The alliance anticipates that taking 1,500 diesel buses off the road will help save 84,675 tonnes of carbon dioxide equivalent (tCO2e) per year and 677,400 tCO2e over the period of eight years.
Net zero-emission goal
The partnership cements both the companies’ commitment to accelerate the UK’s electric mobility and reduce carbon emissions. FirstGroup has pledged to operate a zero-emission First Bus fleet by 2035 while Hitachi too aims to play a crucial role as a climate change innovator. It aims to use technology to help governments, businesses and cities around the world cut carbon emissions.
Under the Hitachi ZeroCarbon mission, the Japanese company aims to provide end-to-end solutions to decarbonise commercial vehicle fleets globally by deploying data analytics and digital optimisation technologies to optimise EV battery performance and life. The role of FirtGroup as a private sector provider of public transport services is crucial in climate change as it can help bring the impact of decarbonisation on a larger scale. “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,” said Graham Sutherland, FirstGroup Chief Executive Officer.