Key Takeaways
Most school buses in the U.S. remain diesel-burning, despite risks cited by the World Health Organization (WHO).
Duncan McIntyre founded Massachusetts-based Highland Electric Fleets in 2018.
Today, Highland Electric is expanding rapidly, targeting fleets in 200 cities and preparing to sponsor the Olympics in 2028.
When Duncan McIntyre’s oldest child was in second grade, the father of three made a troubling observation: the school bus’s tailpipe was positioned at the same height as his young son’s face. “These kids are standing there all over this country in the morning, and again in the afternoon, breathing those exhaust fumes,” McIntyre shared with Entrepreneur.
Despite ongoing advancements in clean technology, most U.S. school buses still run on diesel fuel. The World Health Organization has classified diesel exhaust as a known human carcinogen, highlighting the severe health risks it poses, particularly to children with developing lungs. Data from the World Resources Institute further underscore the vulnerability of young passengers exposed to these harmful emissions.
However, diesel fumes don’t have to be an unavoidable aspect of school transportation. As McIntyre points out, the technology, manufacturing capacity, and equipment needed to shift to zero-emission, electrified fleets have long existed. This realization motivated him to take action.
Founding Highland Electric Fleets in 2018
With a professional background in energy, emissions technology, and financing, McIntyre launched Highland Electric Fleets in Massachusetts in 2018. The startup’s early focus was clear: articulate a compelling product offering and secure that crucial first customer. It took about 18 months before Highland Electric successfully delivered its inaugural project to the city of Beverly, Massachusetts.
Up until then, McIntyre had self-funded the venture. Yet, as the company grew, it became evident that scaling required substantial capital. “The business that we’re in is hugely capital-intensive, so anyone who’s successful [needs] a real strategy around raising capital,” he explains. Highland Electric has since raised significant equity funding to support its platform and business development, alongside project-level financing to purchase equipment and fund operations.
In December 2025, the company announced a $150 million equity investment from Aiga Capital Partners to accelerate its national expansion. This infusion complements approximately $200 million in construction debt and tax-advantaged financing from long-term partners.
Currently, Highland Electric operates fleets in more than 100 U.S. cities and reports an estimated annual revenue between $45 million and $50 million. “We’ve basically doubled year-over-year for a number of years now,” McIntyre says. “And we’ll double again next year in 2027. The industry’s growing quickly, and we’re the largest provider in the space.”
Highland Electric Serves Many Different Communities
From the outset, Highland Electric’s vision has been to serve diverse communities. Their fleets vary significantly in size—from large urban operations with 300 buses and over $100 million in equipment to small rural fleets with just a few buses.
“We’re in urban, we’re in rural, we’re in affluent, and we’re in historically very underserved communities,” McIntyre explains. “Our goal is to serve everyone. So the process of putting all the pieces in place and making that work is a little bit different [depending on customer needs].”
Highland Electric advises against an overnight transition from diesel to electric fleets. Instead, it recommends a phased approach, replacing diesel buses as they reach retirement with electric alternatives. This measured strategy allows cities to manage logistics and budgets more effectively.
While it once took about 18 months to implement a project, McIntyre notes that today, fleet deployment typically completes within six months—reflecting improved processes and growing industry experience.
Manufacturing and Implementing Highland Electric’s Fleets
Manufacturing electric buses through domestic partners is a critical starting point in Highland Electric’s projects. However, McIntyre emphasizes that the vehicle itself is only one component of a complex system transformation.
“A lot of people think of an electric bus or an electric truck purely as that piece of hardware,” he says. “You buy it from a dealership, pay for it and take it home. The reality is, when you’re transforming the way a transportation system works citywide, there’s an incredible amount of other pieces that have to all come together seamlessly.”
Highland Electric assembles the necessary teams for every project, including workforce development specialists who train local city staff in operating and maintaining the vehicles, and construction managers who oversee the design, permitting, and building of electrified depots.
“We may invest $5 or $10 million in equipment underground at that site, but with the view of ensuring that it’ll run reliably for 25, 30 years,” McIntyre explains. “ We have to finance all of it. So we are truly experts in bundling and packaging capital, technology and services, and then bringing it all together very elegantly.”
Staying Within Budget, Collecting Payment Based on Mileage
Highland Electric’s financial model is designed to be cost-competitive with diesel fleets. The company aims to deliver services at or below the equivalent operational costs of diesel, leveraging the electric buses’ simpler mechanics—no diesel particulate filters, fewer moving parts, and no oil changes—to reduce maintenance expenses.
Understanding the budget constraints faced by many school districts, McIntyre stresses the importance of cost control. “School districts always want to put any money they have available back into curriculum for better educational outcomes,” he says. “So keeping costs at the current budget is essential everywhere. We do that very successfully. In some places, we’re able to save 10% or 20% compared to running a diesel fleet.”
Importantly, Highland Electric does not require any upfront payment from cities. Instead, payment begins once the fleet is operational, with charges based on the miles successfully driven—offering a performance-based approach that aligns incentives.
Partnering with Electric Utility Companies
One of Highland Electric’s key growth strategies involves partnerships with electric utility companies. These collaborations help optimize the use of the buses’ large onboard batteries to support the local electrical grid during idle periods.
“Because the vehicles have these big batteries, when they’re sitting idle, we can actually help balance the local grid, which creates incredible resiliency for the community and helps to lower cost for electric rate payers,” McIntyre explains.
These partnerships not only generate additional revenue for Highland Electric but also reduce costs for the municipalities and school districts it serves, making electric bus adoption more financially feasible.
Looking ahead, McIntyre is optimistic about Highland Electric’s trajectory. The company aims to establish fleets in 200 cities within the next year and will serve as a sponsor for the 2028 Los Angeles Olympics.
“We’re out of the world of people tinkering around electric vehicle technology as a hobby, and we’re really more into mainstream adoption,” McIntyre says. “The market is truly taking off, and that’s exciting to see. It’s no longer viewed as something that might or might not exist. It’s viewed as something that’s here for the long run.”
