Clean school bus transition faces setbacks in the U.S. amid manufacturer bankruptcy

A nationwide initiative in the United States aimed at replacing diesel-powered school buses with electric vehicles has encountered significant challenges. The five-year program, designed to reduce emissions in school transport and accelerate the adoption of zero-emission buses, is facing disruptions linked to federal funding delays and industrial setbacks, Axios points out.

As widely known, Lion Electric, a key manufacturer supplying the program, declared bankruptcy and closed its Illinois factory in late 2024. This development has created bottlenecks in the delivery of electric buses, while ongoing maintenance and operational support for existing vehicles are increasingly uncertain. School districts that had planned to transition to electric buses are now evaluating whether to revert temporarily to diesel vehicles.

Electric school buses, though moment in the US

Axios points out that “The Trump administration hasn’t said what will happen to the $2.3 billion in unspent funds in the EPA’s $5 billion Clean School Bus program, created under 2021’s bipartisan infrastructure law”.

The consequences of these setbacks extend beyond individual districts. According again to Axios, the interruption of the supply chain not only delays environmental targets but also raises questions about the industrial robustness of the U.S. electric bus market. The inability to scale production at key facilities has highlighted the dependence of municipal fleets on a small number of specialized suppliers.

Based on data from WRI’s Electric School Bus Initiative, “There are nearly 14,000 committed electric school buses in the U.S. — meaning they’re funded, ordered or delivered — including 5,300 already on the road. However, that momentum died in 2025, with 13,931 committed e-buses, only 73 more than in 2024”.

Operators and local authorities are reviewing contractual arrangements, fleet planning, and budget allocations to mitigate the impact. While some districts continue pilot projects with existing electric vehicles, others are facing operational compromises, including potential increases in emissions from temporary diesel use.