EV bus builder Nexport embraces "consultative sales", new designs to lighten heavy transport loads

After Mercedes Benz Bus announced in February that it would be putting a hold on selling any new products in Australia, Sydney-based Nexport has continued plugging away at a longstanding project to electrify the country's public transport, and more recently the transport operations at ports, logistics hubs and a smattering of schools, RSLs and tourism operators.

It is an endeavour that has required more than $100 million worth of investment since April 2021, with Transport for NSW currently the leading customer.

Nexport CEO Michel van Maanen says what makes bus building so niche in Australia is that the chassis needs to be 2.5m wide rather than the international standard of 2.55m.

"If you go to any other country in the world, you will buy a complete bus that is produced in Ankara (Turkey), Hungary, Germany or wherever it may be," van Maanen explains.

"The factories of the OEMs (original equipment manufacturers) like Mercedes and Volvo have enough capacity to deliver buses all around the world, but they can’t over here for two reasons – the steering wheel is on the wrong side, and the chassis is 5cm slimmer than around the world.

"You could call that a trump trick, which ensures that you need local manufacturing."

Taking advantage of this anomaly, Nexport was founded in 2019 by Kirk Tsihilis to assemble electric buses domestically, with an ultimate goal of developing local designs that can improve the load or range of the vehicles. 

The company was formed as part of a consortium called True Green Impact Group (TGIG), which is dedicated to investing in and developing clean-tech and early-stage environmental or social enterprises.

These range from the non-polluted fabrication of steel to a marine-friendly boat manufacturing operation with its rudder steering towards electrification, but where Nexport fits specifically in the consortium is the True Green Mobility division.

It is a division whose backers also include van Maanen and the St Baker Energy Innovation Fund (SBEIF), itself tapped into yet another grid of electrification-focused companies including Tritium (NASDAQ: DCFC), Applied EV, AMSL Aero, Evie Networks, Pure-EVs and Revel.

Around the same time as TGIG was founded, Nexport purchased Australia's largest bus body builder Gemilang and its intellectual property (IP), which it has augmented since then for designing and engineering the next generation of electric buses.

"The IP is mostly about a specific design of a chassis, and we are therefore unique because we are the only manufacturer in Australia that has no batteries on the body," van Maanen says.

"Normally there are batteries placed in the chassis and then you put the body on top of it with battery packs on the roof. We say don't put battery packs on the roof, because that body then has to carry 1.2 tonnes of weight.

"If you reduce the weight, immediately the impact is you can carry more people and you can drive for longer," he says, adding you can also add solar panels or reflective paint, the latter aiding in reducing the usage of air conditioning and thus extending the range.

Van Maanen says Nexport currently has 100 electric buses in operation in Australia with another 40 being delivered over the next 12 months. The company has further customer commitments in NSW which will likely double the existing fleet

"We are a market leader in Australia, and in Europe and America you would call that the smallest pilot ever," he says.

"More recently, we have been selected as part of a consortium for public transport in NSW to fully electrify depots. We're not only delivering the buses; we deliver the bus plus the the charger plus the electricity connection plus the systems, everything in one package, and calculate it as a total cost of ownership."

He refers to this kind of set-up as a turnkey package underpinned by 'consultative sales' where the customer buys a solution rather than just a product.

"We ask two questions in every conversation we have to understand the journey. The first question is what is your patronage, which means how many people or packages do you transport? The second question is, what is your uptime expectation? How many hours per day does this vehicle have to drive?" he says.

"Those questions define the design and the size of the asset, and the second decides how many charging points do I need and how many kilowatts do I need to charge every time to make sure that they drive and don’t fall still."

Aside from highlighting the in-house knowledge relating to engineering, projects and deployment, the executive espouses a consortium approach to delivering these solutions.

"We have partnerships with Energy Australia, with Evie Networks, with Tritium, and Energy Estate, which is a really big company in doing energy analysis on specific locations to see how much the grids can actually handle in terms of power, because you need to have access to a lot of power," he says.

As Nexport expands it will be hiring another 60 people in the near future to work in new factory sites which are yet to be finalised, most likely in Southwest Sydney, with a view to producing 200 buses annually.

Van Maanen is also in talks with the Victorian Government. What he would like to see as a more common practice with state governments generally is a commitment to deploying a certain number of new EV buses per year, to ensure the continuity and viability of new manufacturing operations.

He is convinced that electric buses are the future, not just from a sustainability standpoint but from a cost perspective as well.

"If you look at a diesel bus on 80,000km per year over 10 years, it costs you $1.56 per km. If you do the same on an electric bus it’ll cost you $1.36 per km, so that's 20 per cent cheaper on every kilometre that you drive," he says.

However, the political landscape is slow moving and this prompted Nexport's leadership to consider their options for diversification and seek a greater proportion of sales from non-public transport customers.

"While Nexport has deals with TSA (Transhipment Services Australia), Punchbowl [Bus Company] and Busabout which are local companies who have bought our buses, we now have smaller buses which we would call 'buses for transport on demand', used by the likes of rugby clubs, RSLs, those sorts of things," van Maanen says.

"We have normal trucks which are being deployed as we speak, and we have a specific product from a license we signed in the Australian Embassy in Paris just when the submarine deal was broken, with a French company called Gaussin. That company delivers APMs and ATMs, what you would call yard tractors and they work in the harbours.

"We deployed eight in Wellington Port, and they carry 35-tonne and 75-tonne containers in the harbour."

The consultative sales strategy came to the fore in this New Zealand deal as traditional charging systems will not work in a fast-moving port environment.

"They actually have assets with swappable batteries because they cannot charge the asset; they can only charge the battery," he says.

"The assets drive 24/7 and when a boat comes in they have to be as quick as possible, so on the site we have a big black box, 1.5m by 50cm, and those battery packs are being charged independently of the asset in a big rack and they're constantly charging them.

"There's a forklift that comes, takes the battery off, puts the fresh battery on and they continue to work, because their operational needs are quite different than public transport."

The company is currently running pilots of the Gaussin vehicles with Woolworths (ASX: WOW), Coles (ASX: COL), Toll and others, and has recently secured a few more deals for its smaller vehicles.

"We are delivering two 7.5-metre buses to an Indigenous tourism company which is in the Mosman Gorge - they’re using them for tourists, and they’re going to also be at Uluru," van Mannen notes.

"We are delivering two 7.5-metre buses to Westside College in Queensland that want to electrify the whole school as they run on solar. There is a lot of traction in the market, and in one-and-a-half months we will bring an electric ute on the market.

"The ute would only be for for commercial fleets. It’s a real utility van, a basic setup just for mining activities and utility companies and service companies for wider fleets."

Nexport chief commercial officer Daniel Porter adds the company also has two buses on trial with Translink in Queensland, a state where negotiations for further fleet deployments are underway, while the company is responsible for 'most of the electric buses you see in Australian airports, particularly Sydney, Melbourne and Brisbane'.

He notes there is currently a tender process happening for an electric bus fleet in the ACT that Nexport is hoping to secure, while options are limited in Western Australia and South Australia as those states' relevant departments have their own long-term contracts locked in.

"We're seeing the momentum building; I would say over the next two years that there'll be a really, really fast uptake," he says.

"There’s still perceived range anxiety in the market – it is less and less relevant going forward. We can see the trials and the buses at the moment, we’re getting so much regeneration out of them. In any town environment the range anxiety is almost gone all together."

Regarding longer distances, for example in rural areas, the range issue still needs to be addressed but Porter believes a battery range of 600km will be achieved for coaches within a few years.