Dive Brief:
- The cost of transit buses is increasing due to tariffs, NFI Group President and Chief Executive Officer Paul Soubry said during the company’s 2025 second-quarter earnings call Friday. Tariffs are being passed along to customers on both current and future contracts.
- Demand remains strong for New Flyer, NFI’s North American transit bus manufacturer, which reported a $13.5 billion backlog of orders, equaling more than 16,000 "equivalent units." The company defines a 60-foot articulated transit bus as two buses and all others as a single unit.
- The first half of this year saw increasing orders for internal combustion engine buses and a “slight decline” in the percentage of zero-emission buses on order, Soubry said, which “we think reflects the new U.S. administration's platform and customer procurement activity.”
Dive Insight:
The cost of new transit buses soared 68% from 2021 to today, Soubry said, with the average selling price for heavy-duty transit buses up 2.7% year-over-year.
“We were directly impacted by tariffs on the imports of steel and aluminum to the U.S. and Canada” during the second quarter, Soubry said. Moreover, the impact of tariffs is unpredictable, he explained. “It’s changing every bloody day,” Soubry said. “A tariff yesterday was X on one country, and now it's Y,” he said. “So you can just imagine how fluid the thing is.”
He said the company is working with its customers on existing orders to negotiate and amend contracts to reflect tariff costs. Last year, the Federal Transit Administration reminded agencies using federal funds to procure transit buses that they can ask the FTA for additional funds and can amend certain contracts to cover price increases.
The FTA said in a July 25 press release it will now allow transit agencies to change federally funded zero-emission projects to low-emissions technology, which could include vehicles or infrastructure. “That's the first time we've seen that,” Soubry said.
Soubry praised the FTA’s funding announcements under the new administration. The U.S. Department of Transportation made $1.5 billion in grants available through the FTA’s Buses and Bus Facilities and Low or No Emission bus grant programs in May and is keeping overall apportionments the same as last year.
“This strong funding support should make for another positive year in the Low or No Emission Grant Program where NFI was the named partner on nearly $340 million awards in 2024,” Soubry said.
