Electric van and bus maker Arrival SA (NASDAQ:ARVL) has unveiled a new prototype of an electric bus that it hopes to begin producing next year.

Series production is due to start at a plant in South Carolina in the US in the second quarter, according to a report by Reuters.

The cost of an electric bus can be up to 50% higher than that of a diesel equivalent, but the Oxfordshire-based company hopes to sell at around the price of a conventional diesel bus.

Arrival’s earlier prototype buses have already been undergoing trials with UK operator First Bus, and public road trials are scheduled to begin in the first quarter of 2022 with the FTSE 250 transport group, and with UPS for its van.

Arrival, which yesterday announced a US$250mln fundraising, said around 12% of the 64,000 vehicles it currently has non-binding orders or letters of intent for are buses. Its South Carolina plant should have annual production capacity of 1,000 units and executives say they will announce more plants soon.

Earlier this month the company warned that production numbers of its first vans and buses will be “significantly lower” than expected next year as it focuses investment on developing other EV platforms such as a larger van, a bus designed for emerging markets and a car.

However, electric bus markets are heating up as countries, states and cities push towards zero-emission transport.

In March, the UK government said GBP120mln of investment was to be made available through the zero-emission-buses regional area (ZEBRA) scheme as part of a wider GBP3bn scheme, while Joe Biden’s recent US$1trn infrastructure spending bill includes US$5.25bn for electric buses through 2026.

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