As President Trump returns to the White House, federal funding for electric school buses is caught up in the administration’s early policy shifts, leaving school fleet managers uncertain about the future of these programs. While the federal landscape is still taking shape, there are many other ways to approach electric bus fleets and keep providing more clean rides for kids. Let’s take a closer look at the available options. 

The future of the Clean School Bus Program 

The U.S. Environmental Protection Agency’s Clean School Bus (CSB) Program, established under the Bipartisan Infrastructure Law (BIL), has awarded approximately $3 billion to fund over 8,000 electric school buses to date. This is an important accomplishment as multiple studies have shown that diesel exhaust pollution can lead to serious health issues and daily exposure contributes to asthma and other respiratory diseases. This transition is first and foremost about healthy and clean rides to school for America’s children. It is also, of course, good for air quality in neighborhoods along bus routes and good for the climate because it lowers harmful carbon emissions. 

With the 2024 CSB rebate cycle having closed in January 2025, those funds are in limbo and the next funding cycle is in doubt until further notice. News is expected in the first quarter of 2025. 

The WRI ESB Initiative reported Feb. 19 that the payment portals for awarded CSB and Clean Heavy-Duty Vehicles Program may have reopened, at least selectively. They’re advising that school districts and companies that have an active award under these programs screenshot and save the portal data.  

In the meantime, if you are a past grantee who cannot access information or funds through the CSB program portal, the WRI Electric School Bus Initiative shared suggested steps to take here in a Feb. 7 email.

Beyond the CSB Program: continued opportunities for school bus electrification 

While the popular CSB program has funded over two-thirds of all committed ESBs in the U.S., there are still over 100 alternative funding sources available to student transportation providers and schools.   

In fact, states like California, New York, Michigan, New Jersey, Washington, Massachusetts, North Carolina, Maryland, Texas, Utah and Wyoming, have rolled out their own mandates and incentives to support the shift to zero-emission school buses. Beyond the state level programs, many cities and utilities also run programs that provide grants, rebates and other forms of assistance. For example, ComEd, a utility company in northern Illinois, runs an electric vehicle program for businesses and the public sector that also supports electric school buses.   

“There are many funding opportunities out there,” says Angela Shuck, Grant Manager at Zenobē. “The challenge is understanding each program’s unique terms, conditions, rules and capacity limits. That’s why, we offer a customized approach to fleet electrification, finding the right fit and mix of available grants for each project.”  

But public funding is just one lever student fleet operators can pull to transition to zero-emission vehicles.   

Approaching ESB batteries as an asset rather than a cost center 

By treating ESB batteries as assets, Zenobē is also able to offer a solution known as “battery-as-a-service” where it purchases and leases fleet vehicle batteries back to operators. Since batteries are the most expensive component of an electric school bus, this significantly lowers the upfront costs. This approach not only shifts the financial burden away from the school fleet operator and to Zenobē, but it shifts the battery performance risk to Zenobē too. Many transit organizations in the U.K. and other global markets have adopted this arrangement to derisk fleet electrification, reducing uncertainty around long-term maintenance and battery replacement. 

Another big barrier to fleet electrification is a lack of data about the “residual value” of the batteries in the electric buses, meaning the battery’s estimated value at the end of its driving life.  

With little resale data at this stage in the industry, financing institutions often estimate that the value of an ESB battery will fall to nearly zero before the end of a typical financing term. Zenobē knows that is not true. The company has been repurposing bus batteries for second-life uses and generating its own position on residual value. This has allowed Zenobē to treat ESB batteries as an asset – the residual value is calculated and applied upfront to help reduce the cost of electrification for the fleet operator. 

Global nonprofit CALSTART has a helpful Innovative Financing Toolkit including an explainer on residual value that Zenobē  contributed to which recommends an industry standard for residual value calculations that lenders could apply to make underwriting more viable and financing more affordable.  

CALSTART’s EV Industry Assessment Specialist Kabir Nadkarni says, “Understanding residual values isn’t just about predicting the future – it’s about unlocking financing for zero-emissions trucks and buses today. With a $2-3B second-life battery market starting to emerge today, residual values of used components from electric vehicles are proving competitive with gasoline vehicles. Leading companies like Zenobē are sending a clear market signal that electric vehicles hold their worth.” 

Reduce operational costs through good battery management 

Over time and with use the total amount of energy that the battery can store will decrease, a phenomenon known as degradation. Ultimately, under expected degradation rates heavy-duty fleet batteries, like those in ESBs, will need to be replaced at least once in a fleet vehicle’s life. That’s why smart ESB battery management applies strategies to maximize each battery’s useful driving life. It’s also important to closely monitor batteries for degradation signs so that they never degrade past the point of utility.  

Fleet operators can extend battery life with practical strategies. “Believe it or not, how you drive and how you charge your ESB fleet will also determine how much the fleet costs you,” says Robert Long, Zenobē’s Second-life Business Development Manager. “Through driver training, techniques like regenerative breaking can charge batteries while the buses are on their routes to reduce charging costs.”  

Driving EVs gently and keeping batteries charged between 20 to 80 percent of their capacity are two simple practices with big benefits to long-term battery health.  

“The goal is to delay the need to replace batteries to keep costs down,” says Long.  

Zenobē offers ESB fleet operators not only the training for drivers but also software which allows battery performance tracking. Through training and close battery monitoring, fleet operators can adopt strategies to slow degradation and save on energy costs.  

Relax and take a deep breath: clean rides for kids are here to stay 

The shift to electric school buses is not just a short-term trend—it’s a long-term transformation. U.S. bus manufacturers are retooling and scaling up ESB production capacity, ensuring a steady supply to meet growing demand. At the same time, advancements in battery technology and manufacturing are driving down battery prices while range and performance are steadily improving.  

Lastly, while federal support in the upcoming years is unclear, state mandates for zero-emission school buses remain in effect with incentives designed to ease the transition for fleet operators.  

At Zenobē we keep building a more sustainable, cost-effective transportation system. We’re here to support you at every stage, from planning and financing to design, implementation, workforce training, regulatory compliance, and utility interconnection.  

The road ahead is clear, and we’re ready to help you navigate it. 

Learn more about our capabilities here. For advice or support with your electric fleet project, connect with our Zenobē North America team via Maggie Clancy, EVP Business Development (Fleet), at maggie.clancy@zenobe.com.