The electric-bus startup Proterra has raised $30 million in new funding, including $6 million from GM Ventures. The company uses relatively small battery packs to keep down costs, intending them to be recharged frequently at rapid-charging stations that can replenish them in less than 10 minutes.

Fuel-saving technology is important to transit agencies, especially now that diesel prices are high and volatile—a gallon of diesel costs a dollar more that it did a year ago. Proterra CEO Jeff Granato says each bus will save the transit agency $600,000 in fuel costs over the 12-year life of the vehicle, plus another $70,000 to $95,000 in maintenance costs. Electricity to charge the buses costs about 18 cents per mile, compared with about $1 a mile for diesel fuel.  Granato says these savings make the total cost of an electric bus comparable to that of a diesel bus over the life of the vehicle, even though the electric bus costs more up front. (The company won’t say how much the buses cost, but they do, apparently, need nearly $700,000 in fuel and maintenance savings to break even with diesel buses.)

In general, the main problem with electric vehicles is the high cost of the battery packs. Batteries are the most expensive part of electric cars, and they’re an important reason GM’s Volt costs twice as much as a comparably sized gasoline-powered vehicle and the Nissan Leaf has a small battery pack that limits the car’s range to around 70 miles per charge. The Proterra bus has a range of only 30 to 40 miles. Achieving even the modest range of the Leaf would add roughly $60,000 to a bus’s price, according to analyst estimates of current automotive battery costs. (Proterra also isn’t saying what its batteries cost.) Although its short range would be inconvenient in a car, it is more practical in a transit bus, which runs a predictable route and can regularly pull into a charging station.

Proterra uses a type of battery chemistry—lithium titanate—that it says allows the batteries to be recharged in less than 10 minutes every few hours all day and still last eight years or more. Such frequent and fast charging would damage other lithium-ion batteries, rendering them useless after just a few years, Granato says. Proterra has also developed an automated charging system. As the bus approaches a charging station, it communicates wirelessly with an overhead charging arm, which takes control of the motion of the bus as it passes underneath, stopping it when the charger is in place. The bus can charge as passengers get on and off. If the bus travels a route that doesn’t completely deplete the battery, it can be topped off in just a couple of minutes, Granato says.

Proterra’s other key innovation is building its buses out of composite materials, saving thousands of pounds to offset the weight of the batteries and make the buses more efficient.

A similar fast-charging system has been developed by Sinautec Automobile Technologies, based in Arlington, Virginia, and its Chinese partner, Shanghai Aowei Technology Development Company. Their buses use ultracapacitors that can be charged even more quickly than the lithium-titanate batteries. But they only hold enough charge to go several city blocks, requiring charging stations at many bus stops along a route. The Proterra system could allow buses to charge just once per route, reducing the number of chargers needed (which it says cost about $50,000 apiece). The Chinese automaker BYD is also marketing fast-charging buses, but its system requires 30 minutes to charge to 50 percent capacity.

The high up-front cost of electric buses continues to limit their appeal, even to transit agencies in the United States that can get the federal government to cover 80 percent of the cost of new buses, says Bill Van Amburg, senior vice president at CalStart, an organization that promotes heavy-duty hybrid and electric vehicles. Another problem is that new chemistries like lithium titanate have yet to be proved to last in buses. Finally, Van Amburg says, transit agencies, which are used to buying buses that can ply any of the routes on their system, would probably need to make some adjustments to accommodate buses that have to charge one or more times per route.

So far Proterra has made about 10 buses, and these are in use by transit agencies in states including California and Texas. The company plans  to use its new funding to scale up production capacity and drive down costs.