Electric Bus Market Size and Share Analysis by Vehicle (Battery Electric Bus, Plug-In Hybrid Electric Bus, Hybrid Electric Bus), Length (More Than 10 m, Less Than 10 m), Battery (Lithium–Iron–Phosphate, Lithium–Nickel–Manganese–Cobalt Oxide), End User (Public, Private) - Global Industry Revenue Estimation and Demand Forecast to 2030

Market Overview

The electric bus market sales volume is estimated to be at 118,237 units in 2022, and it is expected to grow at a CAGR of 29.1% during 2023–2030, to reach 912,354 units by 2030.

The market is experiencing an increase in the demand for non-polluting and fuel-efficient buses. The development of electric automobiles is essentially being fueled by the rising environmental concerns and the stringent laws and government initiatives to meet zero-emissions targets.

The need for such buses is also being fueled by the efforts made by automakers to fund the development of battery-powered vehicles and the rising investments by battery manufacturers in developing technologically sophisticated batteries that are also cost-effective.

Moreover, North America has always been an early adopter of advanced technologies globally, with significant contributions from the U.S. Additionally, it has been playing a crucial role in meeting the growing demand for EVs in the region. A variety of subsidies, financial incentives, and tax credits on such buses are offered by the federal and state governments in the country. Besides, there are a number of tolls and vehicle emission test exemptions for ZEVs in the country.

Being high-occupancy vehicles (HOVs), such buses qualify for reduced rates or exemptions from the toll charges imposed at high-occupancy toll (HOT) lanes in certain states of the U.S., including Arizona, California, Colorado, Georgia, and Hawaii. Additionally, such automobiles are exempted from vehicle emission tests in Idaho, Illinois, Massachusetts, Michigan, Missouri, Nevada, New York, Pennsylvania, and Washington.

Moreover, the European Union has adopted the Clean Vehicle Directive, which mandates that at least 45% of the municipal vehicles be powered by alternative energy sources by 2025 and 65% by 2030. In addition, the Indian government has introduced the FAME II program to increase the usage of electric vehicles, including trucks, coaches, bikes, and scooters. Furthermore, the Swedish government plans to increase the share of e-buses to 15% by 2022.

Growing Concerns over GHG Emissions

The growing concerns of governments and environmental agencies over air quality degradation due to the increasing urban vehicular emissions have led to the formulation of stringent environmental policies. Currently, conventional diesel-powered automobiles are an integral part of the public transportation system and contribute significantly to GHG emissions. Thus, the implementation of stringent policies, with the rising environmental awareness among people, encourages the deployment of low- and zero-emission transport systems across the world.

Moreover, compressed natural gas (CNG)-based public transportation system is still the dominant alternative to fossil-fuel-based public transport systems; however, EVs are gaining attraction due to their zero or low carbon emissions.

For instance, in June 2021, the Federal Transit Administration (FTA), an agency within the U.S. Department of Transportation (DOT), issued a notice offering $182 million in funding for low- and no-emissions buses. This program aims to help the government achieve its goal of reducing GHG emissions by 50% by the end of this decade.

Declining Cost and Improving Operational Efficiency of Batteries

According to industry experts, the average price of Li-ion battery packs for large orders declined from approximately $600/kWh in 2015 to approximately $150/kWh in 2020. As the battery accounts for around 40% of the electric bus manufacturing cost, any decline in the battery price would help OEMs to cut down the price of their buses, thus boosting their sales. Moreover, the increase in the battery production, particularly in China, would further help achieve economies of scale, thereby lowering the battery prices during the forecast period.

Additionally, with technological advancements, the battery capacity is likely to increase, to meet the demand for a longer driving range. Thus, manufacturers are consistently working toward achieving a higher energy density and lower reliance on cobalt, an expensive raw material used in these batteries, which, in turn, would increase the operational efficiency of these batteries and lower their cost, respectively.

As in the case of the ICE, the costs of which have reduced with decades of experience in manufacturing, the cost of electric buses will also continue to fall during the forecast period.

European Region's Increasing Focus on Bus Electrification

The BEB category held the largest share, of 68.6%, in the European market in 2022. The improvements in the battery technology and increasing production of BEBs have brought their operational cost to par with that of ICE-based buses in European countries. This clearly demonstrates the increasing emphasis on bus electrification in the region.

Moreover, European countries, such as France and the U.K., had the largest electric bus fleet in the region in 2022. The country is witnessing an increasing count of collaborations between local and international bus manufacturers, to encourage domestic production.

For instance, in December 2021, a key manufacturer of electric buses in the U.K., BYD UK partnered with Alexander Dennis Limited (ADL) to deliver four 10.2-meter-long BYD ADL Enviro200EV e-buses to Nottinghamshire County Council. These automobiles are being delivered to a customer outside London for the first time.

This is because the U.K. government is actively supporting the adoption of such vehicles by implementing policies, such as purchase incentives, at the national level, to smoothen the transition to electric public transport.

Similarly, the French electric bus market held a significant share in 2022, propelled by the government support for EV adoption and initiatives for controlling emissions.

Similarly, with the government initiatives, the French market is expected to witness a significant growth during the forecast period. For instance, Île-de-France Mobilités, formerly known as Syndicat des transports d’Île-de-France (STIF), the transport authority controlling Paris’ public transport network, in association with Régie Autonome des Transports Parisiens (RATP), aims to reduce its fleet’s fine-particle emissions in Île-de-France by about 50% in the future. Additionally, by 2025, RATP plans for a 100% eco-friendly fleet, for which it has entered into a three-year partnership with Éléctricité de France (EDF), a French electric utility company.

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Long-Term Cost Benefits of Electric Buses

The reducing oil reserves in the major oil-producing countries have led to an increase in crude oil prices globally. Since crude oil imports constitute a significant expenditure for most of the developing countries, the increase in its prices has compelled governments to cut down their oil imports with the adoption of alternative fuels.

Despite the high initial cost of electric buses, they have considerably lower operating costs. Moreover, they are less noisy and require lower maintenance than their conventional counterparts. This is the reason transit agencies in developing countries are focusing on integrating them into their fleets. Moreover, the establishment of new cities in developing countries has offered significant space to support the infrastructure for EVs.

Increasing Government Support in APAC for Inclusion of Electric Buses in Public Transportation

The Chinese market is predicted to grow at a significant pace during the forecast period owing to the increasing government support for the inclusion of such vehicles in the public transportation fleets, falling battery prices, and their better operational efficiency than conventional buses.

The Chinese market for buses is heavily dependent on the government. Moreover, buses in the government sector are used for public transport, transit services, military, and other purposes. Most of the decisions of purchasing these automobiles are made at the central or state government level. Moreover, the Chinese government has a strong commitment to increasing the number of EVs for public electric transportation in the country.

The top three players in the Chinese market, namely Zhengzhou Yutong Group Co. Ltd., BYD Co. Ltd., and Zhongtong Bus & Holding Co. Ltd., together account for a significant share of the sales in the country. The remaining sales are shared by King Long United Automotive Industry Co. Ltd. and Higer Bus Company Limited.

Moreover, the Indian market will grow at the highest CAGR during the forecast period due to the various schemes and regulations that have been put forth by the government to support clean transportation in the country. India, which has some of the world's most polluted cities, is making a strong effort to use EVs to minimize pollution.

For instance, the Phase II of the FAME Scheme was authorized by the government on April 1, 2019, with a budget of about $1.2 billion. In order to clean up the environment, this phase aims to support 7,000 electric buses, 55,000 electric four-wheeled passenger cars, and other battery-powered automobiles. Under this, about 86% of the overall financial support has been set aside for incentives, to create a demand for these automobiles.

Moreover, India is planning to spend around $10 billion more on such buses in an effort to modernize public transportation and reduce air pollution. By 2070, the center wants to have zero emissions overall. Soon, a tender is expected to be floated by Convergence Energy Services Limited (CESL), a division of the center’s Energy Efficiency Services Limited (EESL).

Similarly, under the Green Mobility Scheme, the government aims to procure 20,000 paratransit and 6,000 regular buses that run on alternative fuels. The government is also actively running programs, such as the Smart Cities Mission and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), to develop urban infrastructure, mainly focusing on utilities.

Moreover, OEMs are in contestant conversation with state transport authorities for the supply of such buses in environmentally sensitive areas and urban locations. Tata Motors Limited, Ashok Leyland Limited, JBM Auto Limited, and Deccan Auto Limited are some major players in the Indian electric bus market.

Therefore, because of all these factors, the APAC region had a significant share by volume, in 2022.

Increasing Replacement Sales

Transport authorities across the world are focusing on replacing old diesel-based buses with new ones to curb the rising air pollution. For instance, around one-third of the coaches in China are more than five years old and are expected to be replaced with electric ones in the years to come. As per the World Resources Institute, a global non-profit research organization, Shenzhen has replaced 16,359 of its diesel-powered vehicles with electric ones. Thus, the large fleet of conventional buses in China provides an ample opportunity for higher sales.

Moreover, in April 2021, the U.S. EPA awarded approximately $10.5 million in Diesel Emissions Reduction Act (DERA) funding to replace 473 older diesel school coaches. Such funds will 137 school bus fleets in 40 states, including California, which is receiving $885,000, to be awarded to the Center Unified School District, Elk Grove Unified School District, River Delta Unified School District, and the Robla School District.

Similarly, according to the Canadian Urban Transit Association (CUTA), the average age of conventional buses in the country is 7.7 years, and they release significant amounts of particulate matter, carbon monoxide, and nitrogen oxide. On the other hand, new-generation technology (CNG and electric) is environment-friendly. Thus, around a thousand buses in Canada are replaced every year, most of them diesel-powered.

Public Sector To Hold Larger Share

The public sector held the larger share, of 81%, in 2022 in the global market. The increasing efforts of public transport operators to add EVs to their fleets have predominantly benefited the market growth globally. Additionally, with the ongoing decline in Li-ion battery prices, the upfront cost of such buses is expected to decrease, which, in turn, will reduce their total cost of ownership (TCO) in the coming years. The decreased TCO, in turn, is expected to attract private transport operators, thereby resulting in the faster market growth in the private end user category during the forecast period.

Top Electric Bus Manufacturers Are:

• Zhengzhou Yutong Bus Co. Ltd.
• BYD Company Limited
• Zhongtong Bus & Holding Company Limited
• Solaris Bus & Coach S.A.
• Proterra Inc.
• Dongfeng Motor Corporation
• Anhui Ankai Automobile Co. Ltd.
• Yinlong Energy Co. Ltd.
• Nanjing Golden Dragon Bus Co. Ltd.
• Beiqi Foton Motor Co. Ltd.

Market Size Breakdown by Segment

The study uncovers the biggest trends and opportunities in the market, along with offering segmentation analysis at the granular level for the period 2017 to 2030.

Based on Vehicle

• Battery Electric Bus (BEB)
• Plug-In Hybrid Electric Bus (PHEB)
• Hybrid Electric Bus (HEB)

Based on Length

• More Than 10 m
• Less Than 10 m

Based on Battery

• Lithium–Iron–Phosphate (LFP)
• Lithium–Nickel–Manganese–Cobalt Oxide (NMC)

Based on End User

• Public
• Private

Geographical Analysis

• Asia-Pacific
  • China
  • India
• Europe
  • U.K.
  • Germany
  • Netherlands
  • Lithuania
  • Austria
  • Belgium
  • Poland
  • Sweden
  • Spain
  • France
• North America
  • U.S.
  • Canada
• Rest of the World
  • Brazil