Transport / Electrification
Case Studies
Policy Areas


Electric vehicles have zero tailpipe emissions and thanks to their increased efficiency they are able to reduce greenhouse gas emissions, especially so when powered by renewable electricity. There are two effective ways to accelerate the electrification process of a city: incentivising the use of electric vehicles or pushing forward policies that penalise the use of non-electric vehicles. Policies promoting the electrification of the public transport sector include the introduction of battery-powered electric buses and the promotion of trams and trolleybuses – with or without in-motion charging solutions.

While procurement decisions are often taken at a city level, pursuing electrification of the public transport sector, it is also useful to explore joint procurement across cities and it is key to encourage individual decision makers to adopt more energy efficient transport solutions through regulatory policy. The latter can be done by penalising diesel drives or by promoting individual electric vehicles, including private cars and light commercial vehicles. Some key policies promoting private electric vehicles include the use of road-user charges in favour of electric vehicles (see policy option T2), parking policies in favour of electric vehicles (see policy option T1), access to bus lanes for electric vehicles, and the roll-out of convenient charging infrastructure.

Resource implications and key requirements

A shift to electric vehicles such as buses brings about fundamental changes to the operating model – and the economics. These changes include significant upfront investment in charging and maintenance facilities as well as higher costs for the purchase of rolling stock. They also include important negotiations with the energy sector to ensure sufficient capacity on the local grid and optimal electricity prices for overnight or daytime charging. Personnel will also be affected, and many staff will require retraining and redeployment. Drivers will need to adapt to new driving techniques and protocols for recharging and battery management, while the maintenance of buses and charging infrastructure will change to the extent that these may be outsourced as part of supply-operate-maintain contracts.

Overall, lower fuel and maintenance costs are associated with electric buses compared to diesel buses due to the increased energy efficiency and the use of significantly fewer moving parts, but as the relevant market segments still face higher upfront costs, the payback periods vary greatly depending on local conditions. A more pragmatic approach is the expansion of existing tram or trolleybus networks as this represents less of a change compared to the existing model in operation. Here, one increasingly relevant hybrid solution involves trolleybuses with battery capacity and in-motion charging using existing or new trolley wires for battery charging. This approach, which is mostly relevant for cities with an existing trolleybus service, enables the buses to operate temporarily outside the network of overhead wires, with moderate battery capacity installed.

Policies aimed at the electrification of private vehicles may include revision to a current road-user charge, to parking regulation, or the access of electric cars to bus lanes, which may not have huge resource implications. The installation of charging stations at selected parking places, however, represents a significant investment cost, but is also a cost-effective policy tool.[1] According to research from China, it is four times more effective for governments to spend money on EV charging stations versus direct consumer subsidies. This implies that there is a strong leadership role for the government to take, alongside creating entry points for the private sector. [2]

Installing charging stations in parking spaces or petrol stations across a city is one way forward. Nevertheless, it often proves less efficient than installing dedicated hubs for electric vehicle charging. When placed in appropriate strategic locations, these drive-through EV stations can optimise resource allocation by enabling the charging of more vehicles in one day, as well as reducing the overall time spent looking for EV chargers across the city. In a parking space, an individual may leave his electric vehicle to charge in the morning and then pick it up at the end of the day while in these drive through dedicated hubs the capacity to charge more cars in a day is substantially increased. Despite their advantages, dedicated hubs for EV charging require grid ready land and coordination with the city authorities.

It is also of key importance for a city to adopt long-run measures that take into account the future demand for EV chargers, which is predicted to grow substantially in the next decades. Building infrastructure for future demand is therefore key to achieve the most efficient allocation of resources. As an example, if a city is pushing for policies that remove on street parking from their city model then it must take this factor into account and invest in charging infrastructure located elsewhere.

Implementation obstacles and solutions

Investing in dedicated hubs for enhanced EV charging doesn’t just require a financial investment, it also requires a substantial amount of land. This is a relevant obstacle in many cities worldwide where public land is scarce. In this context, coordination between the private sector and the city authorities is of key importance and can help overcome many challenges. For example, an agreement could take place to reuse land with the purpose of providing charge for EV drivers or alternatively, petrol stations that currently serve only diesel drivers could gradually transform to provide a service only to EV drivers, thus allowing petrol stations to stop being an obstacle and become part of the solution. The latter model would substantially accelerate the electrification process of a city as it allows for more EV drivers to access charging stations while at the same it provides less services to diesel vehicles drivers, discouraging their use.

Electrification of bus services requires considerable investments in fleets, maintenance and charging infrastructure and thus significant capital expenditure. The purchasing cost of electric buses can be double the price of their diesel equivalents and charging stations are also expensive – they cost about US$ 50,000 for a standard depot-based version used for overnight charging. [3] Nevertheless, several cities have introduced electrification of bus services on a small scale, on the back of a clear green vision for the relevant city and with some financial support from national or international entities. It has also been suggested that electric buses have lower operating costs in the long term and are easier to maintain. For example, in the case of Stockholm, evidence suggests that lower fuel costs for electric buses can balance the high investment costs incurred in building charging infrastructure, while achieving in the bus fleet a reduction of up to 51 per cent in emissions and up to 34 per cent in energy use.[4] While financial barriers remain a hurdle in terms of higher upfront costs, a range of financing models exist to leverage energy efficiency savings to shorten payback periods and create attractive solutions. [5][6]


[1] M. Smith and J. Castellano (2015), “Costs associated with nonresidential electric vehicle supply equipment: Factors to consider in the implementation of electric vehicle charging stations”, US Department of Energy.

[2] Li et al (2021), “The Role of Government in the Market for Electric Vehicles: Evidence from China,” World Bank

[3] Financial Times (2019), “Number 214 to Highgate leads UK’s electric bus charge – British companies use Chinese technology to power up in new age of public transport”, Financial Times website, November 2019.

[4] M. Xylia, S. Leduc, P. Patrizio, F. Kraxner and S. Silveira (2017), “Locating charging infrastructure for electric buses in Stockholm”. Transportation Research Part C: Emerging Technologies, Vol. 78, pp. 183-200.

[5] A. Marshal (2019), “Why electric buses haven’t taken over the world – yet”, Wired, June 2019.

[6] Leeder et al (2021), "Going electric - A pathway to zero-emission buses", Policy paper, EBRD.