Giving Compass' Take:
- Dan Zukowski reports on transit agencies facing rising bus costs due to tariffs and shifting away from zero-emission vehicles.
- How can donors and funders play a role in countering the decline in demand for zero-emission transit buses?
- Learn more about key infrastructure issues and how you can help.
- Search our Guide to Good for nonprofits focused on infrastructure in your area.
What is Giving Compass?
We connect donors to learning resources and ways to support community-led solutions. Learn more about us.
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. Transit agencies are responding to facing rising bus costs by passing tariffs 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.”
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, regarding transit agencies facing rising bus costs and emissions trade-offs.
Read the full article about tariffs' impact on transit by Dan Zukowski at Smart Cities Dive.