Unveiling the operational difficulties of public transportation enterprises, why do public transportation "stop"? 591 battery failures in new energy | buses | enterprises

In the building of Baoding High tech Industrial Park, looking down through the top floor window, nearly 200 scrapped Huanghai new energy buses are lying in the parking lot of the seventh branch of Baoding Public Transport Corporation.

In 2015, also here, Baoding Public Transport completed a leap in capacity upgrading from gas to electricity. Baoding Bus Company wrote on its official website that after nearly 30 hours of day and night travel, the large flatbed trailer transported buses produced by Huanghai Bus Factory from Dandong, Liaoning, thousands of miles away to Baoding. "The feat of using pure electric buses for all urban public transportation!"

Six years later, two of the buses experienced spontaneous combustion accidents. This batch of Huanghai new energy buses, totaling 591 vehicles, were all scrapped and shut down due to battery failure.

Until July this year, the suspension of public transportation in Baoding became the center of public opinion. Many people attribute the shutdown to this battery controversy.

But in fact, the suspension of public transportation in Baoding has been ongoing for a long time, and in the past two years, bus systems in many parts of the country have experienced suspension incidents.

The root cause of the shutdown is the common operational difficulties faced by public transportation enterprises: the cessation of new energy subsidies, intensified losses, loss of drivers, and urgent need for vehicle updates.

"Battery failure" worsens the operational difficulties and becomes the "last straw" that crushes public transportation enterprises.

The temporary suspension notice is printed on the bus stop sign.

"It's all stopped."

On July 23rd, the only bus route on the bus stop of a hospital in Baoding City was marked with a red sticker that read "temporarily suspended". The upper end of the sticker was curled and yellowed.

Liu Xing, a 20-year-old bus enthusiast, grew up in Baoding. As usual, he will check the time of the next bus on the "Palm Bus" and slowly walk from the caf é to the station. He has long been accustomed to the fact that some buses have a departure interval of 30 to 40 minutes, and there are elderly people on the platform who cannot wait for more than half an hour, so he can only ask him to help check his phone.

"The shutdown has been going on for a long time," Liu Xing said. "Red stickers can be seen everywhere, and it was a long time before I saw the temporary shutdown notice."

The notice mentioned the suspension of 23 lines. According to a survey conducted by Liu Xing's public transportation fan circle, in 2019, Baoding Bus Company operated more than 80 bus routes. As of February 2023, more than 30 routes have been suspended or cancelled. Four of these lines resumed operation in July this year.

Liu Xing saw that until the end of June this year, someone inquired online, "Is there still hope for the resumption of bus routes that have been suspended in Baoding?" Soon after, "Baoding bus suspension" became a hot topic.

At the end of July, the newly restored No. 18 bus was labeled with a new strip.

Baoding Public Transport Company replied that its operating funds are exceptionally tight, and the first batch of 591 pure electric bus power batteries purchased have exceeded the warranty period, posing safety hazards and withdrawing from operation, affecting public transportation capacity.

"It's all stopped." Li Feng, a driver of Baoding Bus Company, remembers clearly that in May 2021, two new energy buses, Route 13 and Route 20, ignited on the street due to battery failure. In this batch, all 591 Huanghai electric buses were scrapped. The company had to pull back the previously phased out Yutong hybrid buses to make up for the shortfall, but the quantity could not make up for it. As a result, some bus routes were suspended, while others had longer departure intervals.

Li Feng stated that in April 2022, due to epidemic prevention and control, public transportation in the entire city of Baoding was suspended. After resuming work and production, bus routes should have gradually resumed, but many routes still remain stagnant.

"It's been almost two years," he muttered.

Not only in Baoding, Hebei, but also in cities such as Boluo, Guangdong, Dancheng, Henan, Leiyang, Hunan, and Huludao, Liaoning, where public transportation has been suspended since 2022.

In the first half of this year alone, Shangqiu in Henan, Mohe in Heilongjiang, and Yulin in Shaanxi successively issued announcements to suspend public transportation operations.

The buses in these areas have not experienced battery failures, but the announcement mentions the company's tight business operations.

Professor Teng Jing from the School of Transportation Engineering at Tongji University stated that as far as public transportation enterprises themselves are concerned, both state-owned and private enterprises are generally facing the problem of deteriorating business conditions. Stopping operations is a last resort.

"Always counting on subsidies."

"There are at least 20 private bus companies in Baoding," said Xia Yu, the owner of private bus companies. Around 2000, the national public transportation industry underwent market-oriented reforms, and private bus companies emerged.

At that time, Xia Yu was working in a mining field in Fangshan, Beijing. With the closure of the mine, he returned to his hometown, a small county town in Baoding.

He noticed that there were not many buses in the county town, and there was no need to put in any effort to operate buses, and there was no need to work overtime at night. In 2005, he and two friends owned a bus company in the village and bought 30 second-hand gasoline cars for less than 1 million yuan.

Teng Jing explained that public transportation has a social welfare nature, and its ticket prices are often lower than the cost, resulting in losses. Therefore, enterprises rely to some extent on government subsidies for survival.

Xia Yu remembers that in the era of fuel, each small bus could receive about 20000 yuan in fuel subsidies per year.

Ten years later, a wave of new energy swept across the country, and public transportation in various regions embarked on the path of "replacing oil with electricity". The Ministry of Finance has issued a notice to provide subsidies for enterprises to purchase electric buses.

Xia Yu found out that the subsidy policy is quite attractive: a new energy bus with a length of 8 meters costs over 800000 yuan, and the national and local finances each provide subsidies of 400000 yuan. When buying a car, half of the money goes directly to the car company, and the other half is left to the public transportation company, which will deliver it to the car company on its own.

"Basically no need to spend money, it's like giving away a car." What impressed Xia Yu was the additional operation subsidy. The number of new energy buses in enterprises reaches a certain proportion, and each 8-meter-long new energy bus can run 30000 kilometers per year with a subsidy of 60000 yuan. Subsidies are issued once a year, and companies only need to submit audit reports and operational maps for verification.

At that time, Xia Yujian believed that this was permanent money. "I've been hoping for subsidies, but no matter what, there's always someone in charge."

In December 2016, Xia Yu took back 40 8-meter-long new energy buses from Hebei Chang'an Automobile Company in one go. He vividly remembers the neatly arranged green cars parked in rows in the company courtyard, not to mention their grandeur.

"I don't have much of this, I bought over 100 cars."

In Laiyuan County, Baoding City, 100 kilometers away, Zhao Qi, the manager of the public transportation company, has been purchasing new energy buses since 2015, from the initial 35 to 178.

Zhao Qi said that the company's investment in charging piles is not small.

Mr. Zhao Qi feels that this is a large sum of money and is somewhat uneasy. In 2019, he specifically consulted the transportation department about new energy subsidies. The other party stated that the car purchase subsidy will continue for one to two years. "Then I think operating subsidies won't be out of the question."

One year later, Zhao Qi did not receive the operational subsidy for that year as scheduled. He called the transportation department and they said they were in communication with the finance department to allocate this fund. He decided to wait. In 2021, this subsidy was still not available. When Zhao Qi asked the transportation department again, they were very embarrassed. "We have coordinated several times, but the subsidy we want to promote still cannot be pushed. Should we stop waiting?"

Zhao Qi received another message.

On June 7, 2022, the Ministry of Finance stated in its response to the "Suggestions on Continuing the Subsidy Policy for New Energy Bus Operations" that "the established policy goals for the subsidy for new energy bus operations have been achieved." "Urban public transportation belongs to local authorities and should bear the relevant expenditure responsibility."

This means that the national subsidies for public transportation companies have ended, which previously accounted for 60% of Zhao Qi's annual revenue.

Zhao Qi and Xia Yu have discussed subsidies with the county.

"The subsidy originally involves multiple departments." Xia Yu received the most response, "We will help you fight for it.". "The county town is so small, and I grew up with people from the government department. They know my difficulties, but that means the county town's finances are tight."

When Zhao Qi and the county leaders discussed subsidies, the other party admitted that there is a sequence of financial expenditures, first education and medical care, then urban construction and environmental sanitation, and public transportation may have to be ranked last.

The 591 scrapped new energy buses in the urban area of Baoding were also purchased by the Baoding Bus Company in 2015 through a combination of old car subsidies and national subsidies. The staff of Baoding Public Transport Company once stated in an interview that we do want to rely on the financial support of the city, but the subsidies have not been in place for a long time.

"I'm losing money almost every day."

In 2017, Li Feng was admitted to Baoding Public Transport Company and was responsible for one of the busiest bus routes in the city.

This line passes through 8 schools in Baoding. Li Feng parked the car and students came up in groups, one after another. Some people are sticking to the glass in the driver's cab, while others are getting stuck on the door sideways, blocking Li Feng from seeing the rearview mirror clearly.

"If you want to get off the car quickly, dream about it!" Li Feng recalled. Afterwards, he ran several important routes in the city, but never saw the scene of crowds again.

There are no people above some buses in Baoding.

Xia Yu saw that around 2017, private cars and shared electric vehicles in the county town sprung up like mushrooms after rain, and public transportation was no longer a choice for some people, with passenger flow decreasing year by year. Until the end of 2019, when the epidemic broke out, bus passenger flow fell into a low valley.

Last year, Xia Yu was looking forward to a rebound in passenger flow, but "it's not a day when it's fully booked. It's good to be able to fill half of it."

On May 29, 2023, the Ministry of Transport released data stating that in the first quarter of this year, the total passenger volume of public buses and trams in China reached 8.92 billion, a decrease of 48.03% compared to the same period in 2019.

But Zhao Qi calculated, but the operating costs are increasing day by day——

In 2011, when the company used gasoline cars, gasoline was less than 4 yuan per liter, and each driver's monthly salary was over 800 yuan. After deducting various expenses from each bus every day, they could earn 150 to 200 yuan.

After purchasing new energy vehicles, the fuel cost decreases, but the maintenance cost increases, with only charging piles and transformers requiring millions of investments. "The cost of labor is also soaring," sighed Zhao Qi. After 2018, the company basically stopped making profits and relied on subsidies to balance its income and expenses.

Nowadays, "a better route earns only over 100 yuan per day. Some unpopular routes can't even earn enough to cover a few tens of yuan in electricity bills in a day," said Zhao Qi. The income of most routes is offset by vehicle depreciation, personnel salaries, electricity bills, maintenance costs, and so on, "almost losing money every day."

Faced with the disappearance of subsidies and intensified losses, Zhao Qi and Xia Yu also sought a way out.

Since 2020, Zhao Qi has been engaged in sideline work in Laiyuan County, including construction, freight transportation, and reverse buying and selling. "Take a sip of whatever business suits you, all for the sake of giving this bus company some blood."

Xia Yu pulled some advertisements and collaborated with schools and businesses on shuttle buses, but still couldn't afford the expenses. His partner had already withdrawn. "After 2016, I threw all my money into it."

In November 2022, Baoding Public Transport Company admitted that due to a sharp decline in passenger revenue, high costs, and several instances of operating capital shortages, it had to resort to financing and arrears of fees to barely maintain its operations. The financial situation of Baoding Public Transport announced on its website shows that the company suffered a loss of over 66 million yuan in the first half of 2022.

"A very respectable profession."

On the evening of July 26th, at 8:30 pm, Li Feng had just finished work and took his colleague's last bus home.

He leaned back in the chair and took a moment to catch his breath. Starting from 6:30 in the morning, he took a total of 6 bus trips today. Excluding a lunch break of over an hour, the rest time between each trip is only 15 minutes.

Li Feng said that the number of trips determines the income. The driver's shifts are divided into full day shifts, 6 trips, and half day shifts, with 4 trips.

"Don't mention work, get angry." Li Feng was indignant. When he first became a driver, he saw the bus company as a state-owned enterprise, working only 8 full day shifts per month, and earning at least 6000 yuan in income.

Since last year, Li Feng's monthly salary has not exceeded 4000 yuan. This year, many colleagues work all day and earn up to 5000 yuan per month.

"The salary for May was delayed in June, half a month was delayed in June, and it took 5 days for two months' salary to arrive." He added that the provident fund was still owed for 7 months.

At around 6 o'clock, Li Feng arrived at the bus stop to prepare for work.

Li Feng and his family live in the urban area of Baoding, and the conditions are relatively good. He noticed that some colleagues are facing difficulties in using provident fund loans to buy houses; Some colleagues, after half a day's work, start driving taxis, delivering takeout, and driving on behalf of others, constantly taking on part-time jobs.

"If I can't bear it, I'll resign," Li Feng said. In 2019, the company had 2000 drivers, but now there are only a few hundred left.

He used his own route as an example, and now there are 8 drivers responsible for 10 cars, with a departure interval of 12 minutes. He still remembers that in 2019, there were 18 cars and less than 20 drivers on this line alone, and the departure interval was half the length now. "I'm still waiting for the red light, the car behind me is sticking it up."

At the end of last year, Xia Yu reduced four routes to two and doubled the departure interval.

He felt helpless, and in most cases, even an empty car had to run. As soon as the departure interval was long, passengers complained, and there were fewer people who complained about taking the car. It was a vicious cycle. "But now everyone is too lazy to complain, assuming it's only that long."

"The loss of drivers is an important reason for the suspension of the route," Zhao Qi said. In 2017, the company had the highest number of drivers, with 130. There are currently 80 drivers. Therefore, there are over 50 cars without anyone running.

Zhao Qi currently has over 50 buses that are not in operation.

Starting this year, Zhao Qi has cut the monthly salary of drivers by over 1000 yuan.

"Many of them have been with me for more than ten years, sometimes feeling quite indebted," Zhao Qi recalled, his father was a bus driver in Laiyuan County.

In the 1990s, Zhao Qi, who was in his teens, followed his father on a bus. At that time, a worker's monthly salary was 300 yuan, and Zhao Qi's daily operating income was equivalent to a worker's monthly livelihood.

"At that time, bus drivers were a very respectable profession," Zhao Qi sighed.

"It's just the beginning."

On the afternoon of July 24th, in an office of over twenty square meters, there was only Xia Yu alone, who was calculating an account.

Nowadays, the company's new energy buses are experiencing battery degradation issues. Previously, each car was fully charged and could run over 100 kilometers per day, but now these cars have to be charged after running 80 kilometers. Some of the cars have serious quality issues with their batteries.

"If the battery doesn't work, basically this car will be scrapped," Xia Yu said. Buying a battery costs nearly 200000 yuan, so it's better to buy a new car directly. Nowadays, a new energy bus costs at least 500000 yuan, and buying a gasoline powered vehicle cannot obtain a license plate.

On the other hand, due to operating losses, he has already mortgaged his property and taken out high interest loans, still carrying a debt of over 5 million yuan.

"Who is willing to invest money in it?" Xia Yu has heard many colleagues complain that the batteries of new energy buses need to be replaced, and the vehicles urgently need to be updated. However, the company's business situation has already deteriorated and cannot afford this money.

In June 2022, Baoding Bus Company issued a notice of scrapping, stating that 591 faulty Huanghai new energy buses had been in operation for a total of 6 years and 6 months.

According to the law, the mandatory scrapping period for buses should be 13 years.

Promote new energy buses on Baoding bus cards.

Zhang Yi, a practitioner of new energy vehicles, mentioned that in 2015, new energy technology in China was just beginning, and at that time, pure electric buses were not very mature in terms of technical performance indicators. Taking batteries as an example, the power consumption of batteries produced in 2015 was about three times that of today within the same operating range.

At the same time, he stated that the post maintenance requirements for pure electric bus batteries are relatively high. If the vehicle is frequently driven, charged, or left idle for a long time, it will lead to a shortened battery life. About 40% of the cost of an electric bus is on batteries.

"The warranty period of the battery is eight years, and it's coming soon." Zhao Qi said that once new energy buses are scrapped and left in parking lots, there is a safety risk of spontaneous combustion. Buses cannot be transferred as second-hand cars and can only be sold as scrap iron for a few thousand yuan.

"When everyone buys a car at the same time, the time when the problem occurs is about the same. The suspension of public transportation in Baoding is just the beginning." Zhao Qi couldn't help but worry that the issue of vehicle updates will erupt in the near future, becoming the "last straw" that will crush some public transportation companies.

"Perhaps the future will come true."

At the end of February this year, nearly 20 bus owners including Xia Yu delivered feedback materials to Shijiazhuang, Hebei: "Bus companies are unsustainable and hope to coordinate the payment of operating subsidies for the year and introduce relevant purchase subsidy policies." "We earnestly request the introduction of public transportation guidance documents that are suitable for the current situation."

After returning, Xia Yu applied for a temporary closure of the company.

The county leader approached him for discussion. Xia Yu remembered the other party saying, "If it involves people's livelihood, can we think of it again?" Then he promised, "We will set up a budget and help you cover over 200000 yuan first."

Xia Yu hesitated. He is the only bus company in the county town. If it stops, what should everyone do when traveling? But since March this year, he has not paid any more wages to drivers and has been in high debt.

Zhao Qi is also very conflicted. He has a WeChat group of 40-50 people, all of whom are private bus owners. He joked that a few years ago, everyone was discussing "how to get subsidies?" "how to fight for preferential policies?" Now, the daily topic in the group is "what should we do with these cars if we let go?"

Teng Jing is concerned that in the sluggish industry cycle of public transportation, some small private public transportation enterprises are facing the fate of being eliminated.

But he believes that this may also be an "opportunity": the public transportation industry should break away from the mindset of excessive dependence on subsidies and serve "demand".

"People hope that public transportation services will be more proactive and flexible."

Teng Jing envisioned that the future public transportation service model could shift from equalization to differentiation. Affordable public transportation services implement low ticket prices, small vehicle models, and emphasize economy; The basic public transportation service is designed for commuting, emphasizing accessibility; Proactive public transportation services can respond to different needs, flexibly allocate vehicles, and achieve profitability goals.

In his view, future public transportation services are not only convenience, but also rights: people can have freedom of travel, bus drivers can receive reasonable treatment, and bus companies will have lower tax rates.

At the end of July, Li Feng still doesn't want to leave. He is used to living without socializing or traveling, and a bus is everything. He heard that the company had already tendered for 330 new electric buses, "I'll be busy right away."

At present, there are still many electric buses in operation in the urban area of Baoding.

Xia Yu and Zhao Qi are still waiting.

Zhao Qi once had a wish: there were transportation hubs leading to big cities in every corner of the county town. As soon as ordinary people leave their homes, they can take the bus to any place they want to go.

For the past decade, every time he mentioned it to the county, he would always smile across from each other and there was no further conversation.

"Perhaps the future will come true," he said.