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Published: May 2017
Report Code: AT10573
Category : New Energy Vehicles & Components
Global electric bus market is expected to witness a CAGR of 33.5% during 2017 – 2025 led by various reasons. The policy makers of various countries are focusing on developing public transit infrastructure with no or low pollution to tackle the air pollutant emissions, mainly in the densely-populated cities and mega-cities. The developed countries are replacing their existing diesel and natural gas based public transit to zero emission buses. The surge in urbanization, along with lower operating cost of electric buses is propelling their growth in the developing countries.
The rising interest of people worldwide in the new energy vehicles and their increasing demand have led to several events and exhibitions. Such events and exhibitions are either entirely focused on electric vehicles or new energy vehicles are a part of their agenda.
Led by China, Asia-Pacific accounted for the highest number of shipments in the global electric bus market in 2016. The Chinese electric bus market is expected to grow significantly, during the forecast period, owing to the increasing urbanization and development of several newly built advanced public transit systems in its smart cities.
Besides China, the Indian government has also shown its interest in using electric buses. India’s leading bus player, Ashok Leyland, is expected to commercialize their circuit electric bus in India by 2017. Tata Motors, another Indian company, completed its first commercial pilot of electric bus in April 2017. In Europe, U.K., the Netherlands, France and Germany are the major markets for electric buses. In 2015, the government of U.K. launched a double decker electric bus in London. Côte d’Ivoire, Uruguay and Brazil are expected to be the early beginners in making use of electric buses in the Rest of the World region.
The premium price of electric buses is a major hindrance in their large-scale adoption in public transit infrastructure, especially within the developing countries, where regional governments are focusing more on low emission natural gas powered buses.
The venturing of regional competitors in the global market have been one of the major trends in the global electric bus market. The adoption of electric vehicles has been surging globally, and none of the markets is anywhere near saturation. This has been encouraging the regional electric bus manufacturers to enter the international market. For instance, in 2015, Chinese manufacturer - Yutong begun a trial run of its electric bus in Paris, France, in a bid for a contract to replace 9,200 city buses with their electric counterpart. Another Chinese company, BYD, entered the Brazilian market in 2013, and the U.S. market in 2014 and the South Korean market in 2016. BYD also plans to enter the Indian market in near future. A Finnish start-up company, Linkker, is also targeting to venture into Netherlands and France.
The increasing product portfolio of several electric bus manufacturers is another major trend prevailing in the market. Proterra, Ebusco, Ashok Leyland, Solaris, and Tata Motors have been the major companies launching new electric bus in the recent past.
The rising concern about greenhouse has (GHG) emission and long term cost benefits provided by electric bus are alluring transit agencies to adopt electric bus. According to a report by the World Health Organization (WHO), air pollution is one of the leading causes of death in Europe. Every year about 100,000 deaths in Europe occur due to air pollution. Considering the negative impact of air pollution, the governments around the world are investing heavily in reducing pollution levels. France, the U.K., and Germany are some of the early adopters of electric bus as means of public transportation system.
Political instability in major oil producing countries has intensified the instability in crude oil prices. The upstream supply chain of crude oil is also being affected by the civil war in the oil producing countries of Middle-East. As a result, the transit agencies around the globe are increasing the number of new energy vehicles. In spite of the high initial cost, electric buses have low operating cost. The transit agencies in developing countries are focusing more on long term environmental and cost benefits. The establishment of new cities and satellite cities in developing countries offers significant development space to support the infrastructure for electric buses.
An electric bus in their entire life cycle saves fuel of around $365,000 value, as compared to diesel buses; and $ 225,000 as compared to natural gas (CNG) buses. Moreover, electric buses are less noisy and require lesser maintenance, as compared to their conventional counterparts. Transit agencies, including Foothill Transit in California (the U.S.), Tennessee (the U.S.), the Nashville Metropolitan Transit Authority, Worcester Regional Transit Authority, Massachusetts (the U.S.), and Boreal Transport (Norway) are deploying electric buses to develop sustainable transport systems.
The increasing number of venture funding is another major driver in the electric bus market. The electric bus market is still in its nascent phase, and requires further technical development for their increased adoption. Many venture capital firms have shown interest in the market by providing large funds to the electric bus players. Venture capitalists, such as General Motors Ventures LLC and Kleiner Perkins Caufield & Byers, recently invested $30.0 million in Proterra Inc., a U.S. based electric bus manufacturing company. Moreover, the company has gained over $120 million from private equity funding, since 2011. Partnerships between Transdev (an international public-private transport operator company based in France) and the transport department has been encouraging the local transit agencies in American and European countries, to increase the number of electric buses.
The emerging economies are expected to offer growth opportunities for the electric bus market during the forecast period. China was among the earliest adopters of electric vehicles (EV) in the world. The country has been aiming to increase the number of electric vehicles, for which the government rolled out several subsidy schemes. India, another emerging market has set a target to deploy over 10,000 electric buses in near term.
The global electric bus market has a consolidated structure, where the top three players held a majority share in 2016. Some of the major companies operating in the global electric bus market include Yutong Group, AB Volvo, Shenzhen Wuzhoulong, BYD, King Long, Proterra, Daimler, Solaris, Zhongtong, Ebusco, Alexander Dennis, and Ashok Leyland.
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