Generate Capital Inc., a financier, owner, and operator of distributed infrastructure, announced a joint venture to launch the first electric bus leasing program of its kind in the U.S., in partnership with BYD Motors Inc.

As part of the joint venture, $200 million will be allocated to this pioneering lease program, which will help public and private sector clients accelerate adoption of battery-powered electric buses by reducing upfront costs. In doing so, the program will also help provide cleaner, quieter, safer, and more fiscally responsible transportation choices.

According to Bloomberg New Energy Finance, the U.S. energy efficient transportation market is expected to grow 500% over the next eight years. Today, there are approximately 345,000 electric buses on the road globally (according to the 2017 Global EV Outlook), yet the U.S. battery-electric bus stock stands at only about 300 (two-thirds of which were made by BYD). While electric buses save substantial money over the life of the asset, they do require higher upfront investment than conventional diesel-powered buses. This factor has limited the adoption of electric bus technology in the U.S. — particularly among private-sector clients and smaller municipalities where such start-up costs can be daunting.

The Generate-BYD partnership aims to provide these entities with the same access to clean transportation options that larger municipalities use to save substantial money. For instance, BYD client Antelope Valley Transit Authority (AVTA) in Los Angeles County estimated a cost savings of more than $46 million over the lifetime of a new fleet by electrifying its buses; this equates to approximately $46,000 per bus per year in savings compared to an all diesel fleet. In addition, AVTA estimated that noise pollution would be reduced by 50% and that the all-electric fleet would provide elimination of CO2, NOx, PM10, and PM2.5, improving air quality. AVTA will become the nation’s first 100% electric bus fleet by the end of 2018.

This innovative lease program already has several clients, including prominent universities, top corporations, and smaller municipalities. According to the U.S. Department of Transportation, every zero-emission bus eliminates approximately 1,690 tons of CO2 over a 12-year period. This is equivalent to taking 27 cars off the road. These buses also eliminate approximately 10 tons of nitrogen oxide, and 350 pounds of diesel particulate matter.

“BYD’s mission is to fundamentally change the world by reducing our dependency on carbon-based fuels through the development and advancement of battery- and electric-vehicle technology,” said BYD President Stella Li. “This partnership will be critical in that effort by creating new financing alternatives to a broader range of clients.”