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“We are moving Nova Bus into the future of transportation,” says Olof Persson, president and CEO of the Volvo Group.

Christinne Muschi/The Globe and Mail

In the Quebec government's push to become an electric transportation hub, Volvo Group affiliate Nova Bus Corp. is starting small, but has big ambitions.

The St-Eustache-based manufacturer will build three all-electric buses that will roam the streets of Montreal as of late 2015. The prototype buses are part of a $23-million pilot project to test for three years the ruggedness of those quick-charge vehicles. But the Volvo affiliate has an eye on a bigger prize, as Montreal's transit corporation, the STM, plans on buying only electric buses to renew its fleet of over 1,700 diesel and hybrid vehicles as of 2025.

"In the long run, all of the city's mass transit will be electric," said Quebec Premier Pauline Marois as she unveiled her government's $12-million contribution to the project. The sum was taken from the $516-million earmarked for the electrification of Quebec's transportation means, the centrepiece of the Parti Québécois's new $2-billion job strategy and Ms. Marois's pet project.

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This is music to the ears of Nova Bus, the third transit bus manufacturer in North America behind New Flyer Industries of Winnipeg and Gillig Corp. of Hayward, Calif., with an estimated 18 per cent of the market.

"We are moving Nova Bus into the future of transportation," said Olof Persson, president and chief executive officer of the Volvo Group, the Swedish manufacturer of trucks, buses and construction equipment that parted ways in 1999 with the car maker that bears the same name.

While all-electric buses are currently being tested in a small number of European cities such as Gothenburg, Sweden, where the Volvo Group is headquartered, Montreal is the first city in North America that Volvo has chosen to try out its all-electric buses. The buses built in St-Eustache, a town northwest of Montreal, will use the energy storage technology developed by Volvo labs. However, the customization of the buses to STM standards and the devising of Montreal's two charging stations will be done by Nova Bus, whose all-electric R&D team will grow to 60 specialists from its current 10 members.

Mr. Persson believes Volvo will have learned enough from its pilot projects dubbed Electro Mobility to start the commercial production of all-electric buses by 2016 or 2017.

"Electro Mobility is the future and that will drive investment in Canada and elsewhere. We are going to put more resources and more engineering on this, thereby securing Nova Bus's business future in Quebec," he said.

Mr. Persson did not specify, however, if that commercial production would lead to additional investments and hiring. Nova Bus employs about 925 at its three plants in St-Eustache, St-François-du-Lac and Plattsburgh, N.Y.

It remains to be seen to what extent other cities will follow Montreal's lead. Nova Bus started assembling hybrid buses two years ago, and the greener buses still account for a small share of its production, although this proportion should increase to close to 50 per cent with more recent contracts, indicated Jean-Pierre Baracat, Nova Bus's president. For example, the Chicago Transit Authority just ordered 300 diesel buses.

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Some cash-strapped cities might take a pass on the more expensive diesel and electric buses, even if they will likely turn out to be cheaper over their life cycle given fuel savings.

Mr. Persson would not disclose the price of Nova Bus's electric vehicles. However, STM chairman Michel Labrecque said Montreal expects to pay between $1-million and $1.2-million for an all-electric bus, as opposed to around $500,000 for a diesel bus and $750,000 for a hybrid bus.

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