No one is going to confuse the all-electric EcoRide BE35 from Proterra with a Tesla Roadster.

First, the EcoRide is a bus. It will average about 15 miles per hour and likely spend its life circumnavigating downtown urban centers. It also seats about 40 people as opposed to two and there is room to put up public service announcements or ads ("Thinking of College? Try The University of Phoenix.") above the passenger windows. The zero-to-60 miles per hour stats were not available.

But there are similarities. Both sport modern, lightweight chassis. And both provide quiet, smooth rides. A group of us piled on for a ride through downtown San Jose, Calif. The fumes, lurching starts, and noise that you might associate with bus travel were gone. The passengers-mostly city officials, lawyers and cleantech fans-generally gave it upbeat marks.

While less glamorous, the EcoRide and buses like it could emerge as one of the early large markets in electric transportation. California has already mandated that 15 percent of the vehicles in state transportation fleets must be zero emission vehicles by 2012, said Proterra founder Dale Hill. Hydrogen fuel-cell buses remain stuck in development so that leaves the market largely open to battery-powered buses and, arguably, plug-in biodiesel hybrids. (San Francisco has been testing biodiesel and biodiesel hybrids.)

More importantly, the way buses are used and owned fits better with the economics and technical capabilities of batteries. In short, batteries remain extremely expensive and cannot take vehicles as far as a tank of gas can. Few charging stations exist. Batteries typically also take several hours to charge.   

Electric vehicles might cost less over their lifetime than gas vehicles, but consumers generally don't calculate total cost of ownership when they are buying things.

The bus market, by contrast, is very different. Cities will calculate their fuel costs and maintenance cost over the life of a vehicle. Proterra's bus will cost around $4,000 a year to power with electricity. A similar diesel bus might require $40,000 to $45,000 of $3.50 a gallon diesel. An electric school bus that gobbles $8,000 to $10,000 of diesel a year only needs $750 of electrical power, he added.

The Proterra bus costs several thousand more than a regular bus, he admits, but the breakeven point comes about six years into the twelve year life of the bus. Over the twelve year period, the savings could come to around $310,000.

Charging stations are also less of a problem. Municipalities have central maintenance stations where buses could be charged. Since the buses don't have to do long distance trips, they will likely always be close to a charger. The relative short length of the trips municipal buses take – 30 to 60 miles a day – allows Proterra to reduce the size of the battery pack.

Proterra also is contemplating inserting overhead charging points (similar to those wires for running today's electric buses) to give batteries a jolt.

The buses run on lithium titanate batteries. This strain of lithium batteries can't hold as much energy as classic lithium cobalt batteries, but they can be charged much more rapidly.

The bus can also recover 92 percent of the kinetic energy from regenerative braking for the battery.