The Shenzhen Bus Group has declared that the Chinese megacity will electrify its entire fleet of 16,000 buses by the beginning of 2018, making Shenzhen the first city in the world to have a fully electric bus fleet. Shenzhen first began adopting electric buses in 2009 as part of China’s New Energy Vehicle Program, which challenged 10 Chinese cities to deploy 1,000 electric vehicles each year between 2009 and 2012.

Home to more than 11 million people, the city first launched its pilot of electric buses in 2011. Just four years later in 2015, the city had 3,600 electric buses jetting around on its streets, and by 2016, it had a fleet of 9,000. Today, 15,000 of the city’s 16,000 buses are electric – with the remaining 1,000 to be electrified by the end of this month. The policy is part of the city’s solution to China’s mounting smog woes and its pledge to reduce carbon emissions – not to mention make China a forerunner in the EV market.

Although the electric bus fleet will be cheaper to operate and maintain than diesel, the transition has been a costly one. Shenzhen Bus Group has adopted different models in an effort to mitigate the high cost of the transition from diesel to electric, including experimenting with leasing mechanisms for both vehicles and batteries. The City has distributed risks among different stakeholders, including bus operators, manufacturers, utility providers, and other service providers.

But innovation is hardly new to Shenzhen, which is home to the headquarters of Chinese giants like ZTE, Huawei, Tencent, BGI, not to mention BYD (“Build Your Dreams”) – one of the world’s leading lithium-ion battery manufacturers. Lithium-ion batteries are used in everything from mobile phones and computers to electronic vehicles (EVs). BYD will provide 80 percent of the city’s electric buses

A 2016 report found that 366 out of China’s 366 cities do not have safe air, according to the World Health Organization’s air quality standards, and that vehicles were the major cause of pollution in Shenzhen. Last year, environmental organization WildAid created a PSA warning of the perils of air pollution, conveying a dystopic world where citizens go about their daily lives sporting comically long nose hair.

Shenzhen’s electric bus fleet is part of China’s larger effort to reduce carbon emissions and clean up pollution in its biggest cities as part of the country’s pledge to the Paris Agreement.It is predicted that the buses will reduce CO2 emissions by 48 percent. Although some of the electricity used to power the buses will come from coal, the plants are far from the city center, meaning that they will not directly affect air quality in the city. The city plans for all of its taxis to be electric by 2020 as well, before moving to electrify cars and taxis.