U.S. Electric Bus Market Research Report: By Vehicle Type (Battery Electric Bus, Plug-in Hybrid Electric Bus, Hybrid Electric Bus), Length (>40 Feet, <40 Feet), Battery (Lithium-Ion, Nickel-Metal Hydride), Charging Type (Plug-In, Pantograph, Inductive) - Industry Revenue Estimation and Demand Forecast to 2026

Market Overview

The U.S. electric bus market is estimated to generate revenue of $490.6 million in 2021, and grow at a CAGR of 31.4% during 2021–2026. The key factors responsible for the growth of the market include environmental benefits, stricter regulatory measures to reduce emissions, the availability of local, state, and federal funding for zero-emission buses, long-term economic benefits to transit agencies, falling battery costs, and improving operational efficiencies.

The pandemic caused significant economic and financial disruptions on EV industry in the country. The U.S. electric bus component industry is dependent on Chinese imports for electrical and electronic components. However, the government is strongly focusing on providing funds and introducing policies and programs to enhance the use of electric vehicles, including buses. People are also concerned about personal as well as environmental health. Awareness regarding pollutant emission reduction, fuel efficiency, operational/maintenance cost savings, and many other advantages will boost the recovery of the market for electric bus, post the pandemic.

More-than-40-Foot Buses, and Li-Ion Batteries Dominate Market

More-than-40-foot buses dominated the market in the U.S., during the historical period (2017–2021), on the basis of length, and they are expected to remain the larger category during the forecast period, in terms of both volume and value. The difference in mileage between diesel-hybrid and diesel buses favors the hybrid technology for longer buses. A 60-foot articulated diesel-hybrid bus has a 38.5% better fuel mileage than a comparable diesel bus of the same size, whereas a 40-foot diesel-hybrid bus has a 21.2% better fuel mileage as compared to a 40-foot diesel bus.

Lithium-ion (Li-ion) batteries recorded the largest share in the market in 2021, based on battery, and they are projected to continue dominating the market in the coming years, in terms of both volume and value. The falling prices of Li-ion batteries, coupled with their inherent advantages such as low weight, maintenance costs, and self-discharge rate, smaller size, and higher energy density over nickel-metal hydride (NiMH) variants strengthen the demand for them.

Battery Electric Buses (BEBs) and Inductive Charging Technology To Witness High Growth Rates

The BEBs category is expected to witness the fastest growth in the U.S. electric bus market over the forecast period, in terms of both volume and value, based on vehicle type. This is mainly attributed to the fact that BEBs have evolved over the time, especially in terms of the batteries, with assistance from both government and private programs. Additionally, most urban areas in the country experience air quality problems, which is prompting private and government transit agencies to purchase BEBs.

The inductive charging technology is expected to be the fastest-growing category in the market during the forecast period, in terms of both volume and value, based on charging type. This is majorly attributed to its ability to quickly charge the electric buses and reduce the anxiety of operators. Many manufactures of charging systems are collaborating with bus makers and public transit authorities to increase the adoption of this technology in the country.

Government Initiatives Are Key Trend in Market

Programs and projects such as the National Fuel Cell Bus Program (NFCBP) and the American Fuel Cell Bus (AFCB) Project have resulted in an increasing adoption of electric buses in the country. This is also paving the way for technology transfer, policy groundwork, and growth of related components’ manufacturers in the market for electric bus in the U.S.

Moreover, various states in the country have started shaping their product development policies that conform to air quality and climate change mitigation standards, with California leading the charge. Funding programs to encourage the adoption of these vehicles are also growing in number in the country. For instance, in FY2021, the Low or No Emission Grant program awarded grants to over 50 states and local governments, totaling $182.9 million, for the purchase or lease of zero-emission and low-emission transit buses, as well as for the acquisition, construction, and leasing of the required supporting facilities.

Environmental Benefits, Falling Battery Costs, and Improving Operational Efficiencies Boosting Market Growth

The growing concerns of local governments and environmental agencies over air quality degradation due to the increasing urban vehicular emissions have led to the formulation of stringent environmental policies in the U.S. Currently, conventional, diesel-powered buses are an integral part of the public transportation system, but they contribute significantly to greenhouse gas (GHG) emissions. Thus, the implementation of stringent policies, coupled with the rising environmental awareness among people, is encouraging the deployment of low- and zero-emission transport systems in the country. This is further boosting the growth of the market.

Further, according to industry experts, the average price of Li-ion battery cells for large orders declined from around $1,000 per kilowatt-hour (kWh) in 2010 to around $310/kWh in 2019. As the battery accounts for 25–40% of the electric bus manufacturing cost, the declining prices of the batteries would help bus companies keep the prices of the automobiles under check. Furthermore, it is expected that the cost of electric vehicles, including buses, would come down due to the increasing operational efficiencies. Thus, the falling costs of batteries, along with improved operational efficiency of the electric bus, lead to its increased sales.

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Market Players Involved in Partnerships and Geographical Expansions to Gain Competitive Edge

The U.S. electric bus industry is consolidated in nature, and in recent years, the players have been involved in partnerships and geographical expansions in order to attain a significant position. For instance:

• In May 2021, BYD and Levo Mobility (a joint venture of Nuvve Holding Corp., Stonepeak Partners L.P., and Evolve Transition Infrastructure LP) entered into a partnership, under which Levo intends to purchase up to 5,000 medium- and heavy-duty, vehicle to grid (V2G)-enabled BEVs over five years. The buses may include transit buses and coaches, yard tractors, drayage and refuse trucks, last-mile delivery vehicles, and school buses.
• In May 2021, Lion Electric, an all-electric truck and bus manufacturer, announced plans to open a new manufacturing facility in Joliet, Illinois. The company has committed to investing at least $70 million over a three-year period, as part of an agreement with the state government. The 900,000-square-foot facility will be the country’s largest dedicated production site for zero-emission medium- and heavy-duty vehicles, with an annual production capacity of up to 20,000 all-electric buses and trucks.

Key Players in U.S. Electric Bus Market Are:

• Proterra Inc.
• BYD Motors Inc.
• NFI Group Inc.
• GreenPower Motor Company Inc.
• GILLIG LLC
• Blue Bird Corporation
• AB Volvo
• The Lion Electric Co.
• Daimler AG
• REV Group Inc.

Market Size Breakdown by Segment

The U.S. electric bus market report offers comprehensive market segmentation analysis along with market estimation for the period 2017–2026.

Based on Vehicle Type

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

Based on Length

• >40 Feet
• <40 Feet

Based on Battery

• Lithium-Ion (Li-ion)
• Nickel-Metal Hydride (NiMH)
• Others

Based on Charging Type

• Plug-In
• Pantograph
• Inductive