Tesla Alum to Build Electric Buses in California

A South Carolina startup that makes electric buses has received a $3 million grant from the California Energy Commission to help set up a manufacturing plant in Los Angeles County.

by David R. Baker, San Francisco Chronicle / April 9, 2015
(TNS) -- Ryan Popple helped steer Tesla Motors through some of the toughest years of the electric automaker’s life, when a cash-flow crunch and a global financial crisis nearly killed the company.

Now, he’s applying the electric vehicle idea to public transportation — and bringing a few manufacturing jobs to California along the way.

Last year, Popple took the CEO job at Proterra, a South Carolina startup that makes electric buses. The company has opened a San Bruno office, with plans to expand. And on Wednesday, Proterra received a $3 million grant from the California Energy Commission to help set up a manufacturing plant in Los Angeles County.

Biggest customer

The factory, in the San Gabriel Valley’s City of Industry, will occupy a facility that used to make lighting fixtures. It lies within the service territory of Foothill Transit, a public transportation agency that happens to be Proterra’s biggest customer, with 15 electric buses on the road now and another 13 on order. The new factory will initially employ about 50 people, Popple said.

A $775,000 electric bus may sound like a tough sell, considering that buses burning diesel typically cost $300,000 or so. The company’s proprietary recharger, which can replenish a bus battery in just 10 minutes, adds another $369,000. Factor in last year’s plunge in oil prices, and Proterra’s task seems even harder.

But Popple says rechargeable buses have benefits that diesel can’t match, especially in California. By 2030, Gov. Jerry Brown wants to cut in half the state’s use of oil for transportation. And California’s urban areas, particularly the Los Angeles region’s massive sprawl, constantly struggle with air pollution. Electrifying public transportation within cities would be a substantial step forward, Popple said.

“The goal for this should be for us to get diesel and natural gas out of urban core,” he said. “It won’t happen overnight, but it’s doable. And it’ll be a better future than what we have now.”

Proterra has raised about $125 million from investors that include GM Ventures, Constellation Technology Ventures, Edison Energy and Kleiner Perkins Caufield & Byers, where Popple used to be a partner.

He also served as Tesla’s senior finance director, joining in 2007 as the company was struggling to bring down the costs of its first car, the Roadster. CEO Elon Musk now says Tesla came “within a few days of being bankrupt” at the end of 2008. But the company found more financing, wrestled its costs under control and won a $465 million federal loan to open its factory in Fremont. Popple left in 2010 to join the Kleiner Perkins venture capital firm.

“Some of the darkest years at Tesla were probably some of the best startup training I could have had,” he said.

Cash and costs

One lesson: keep a close eye on cash and costs. Proterra has already brought down the cost of its buses, which used to sell for more than $1 million. Diesel prices, currently just over $3 per gallon in California, would need to fall to $1 before the buses no longer made financial sense for customers, Popple said.

Tesla’s travails also taught him the importance of focus. Several companies have expressed an interest in using Proterra’s electric drive train for dump trucks or mining equipment, Popple said. Musk had similar opportunities to take Tesla in different directions, but chose to focus on the company’s next car instead, he said.

“One of the best lessons I learned was watching him say 'no’ to very good ideas, especially around product proliferation,” Popple said. “Execution is so important in a 200-person startup that you’re better off having everyone rowing in the same direction, rather than in 10 different directions at the same time.”

©2015 the San Francisco Chronicle. Distributed by Tribune Content Agency, LLC