China Electric Bus Market Overview
The Chinese electric bus market is attained a size of 112,966 units in 2017 and is forecasted to reach 299,866 units by 2025, registering a CAGR of 15.9% during 2018–2025. The market witnessed a significant growth in the historical period, mainly driven by government subsidies. Increasing government support and falling battery costs are expected to drive the sales of these buses during the forecast period.
CHINA ELECTRIC BUS MARKET, BY CUSTOMER, UNITS (2013-2025)
On the basis of type, Chinese electric bus market has segmented into battery electric buses (BEVs), plug-in hybrid electric buses (PHEVs) and hybrid electric bus (HEVs). BEVs operate with the help of battery and motor/ generator and do not have an internal combustion engine (ICE). These buses are the costliest among all types of transit buses; wherein the battery accounts for a major part of their total cost. PHEVs are powered by a battery as well as an ICE. Unlike BEVs and PHEVs, charging stations are not required to charge the batteries of HEVs. An HEV converts the bus momentum (kinetic energy) into electricity, which recharges the battery when the bus slows down or stops.
Among all the three vehicle types in Chinese electric bus market, BEVs are expected to dominate the sales during the forecast period, accounting for more than three-fourth of sales by 2025, due to increased government support for these buses. Small buses (<8m) accounted for the maximum share, at more than 40%, in the total electric bus sales in the country in 2017, due to their low price. However, the fastest growth during the forecast period is expected from the 8-10m category buses.
In terms of customer, the Chinese electric bus market is categorized into public and private. Among these, the public category accounted for a larger share in sales volume, valued at more than 65% in 2017, driven by increasing government orders for electric buses. This category would also witness a faster growth during the forecast period, with reduction in electric vehicle subsidies having a limited impact on this category, as the government sector is less cost sensitive compared to the private sector.
China Electric Bus Market Dynamics
China has a few million buses/coaches accumulated over the last decade, out of which, around one-third of the buses are more than five years old. These old conventional buses are expected to be replaced by new electric ones during the forecast period. Large fleet of old conventional buses in the country provides considerable opportunity for the electric bus sales in the country. Moreover, additional buses would become old during the forecast period, which would only benefit the Chinese electric bus market.
The Chinese government has a strong commitment towards increasing the share of electric buses in the transportation system of the country. The Chinese electric bus market is expected to witness improved quality of buses during the forecast period. In the new subsidy scheme, there is an increased emphasis on battery technology and performance which better addresses consumer utility and concerns, thus improving the quality of future electric buses in the country during the forecast period.
Limited charging infrastructure is a major restraint hampering the growth of the Chinese electric bus market. The combined charging and battery-swapping stations in the country are less than 500 and the government plans to increase them to 12,000 by 2020. The subsidy for installing a charging station is relatively less considering the high initial investments and long payback period for charging stations. Apart from charging stations, support from other entities such as electricity utilities, financial institutions, service providers, and leasing companies is also not adequate, which adversely affects the Chinese electric bus market.
Reduction in subsidies has increased the upfront cost of electric buses when compared to conventional buses, posing a challenge for the Chinese electric bus market. The OEMs and bus manufacturers which enjoyed considerable profit margins in the historical period, would now need to cut profits to maintain reasonable retail price for electric buses.
China Electric Bus Market - Competitive Landscape
Similar to the conventional bus market, domestic players account for most of the sales in the Chinese electric bus market. Important players in the market include Zhengzhou Yutong Group Co. Ltd., Higer Bus Company Limited, BYD Company Limited, Zhongtong Bus & Holding Co. Ltd., Dongfeng Motor Corporation, King Long United Automotive Industry Co., Ltd, and Anhui Ankai Automobile Co. Ltd.