Electric Bus Market Size
The global electric bus market size was valued at USD 54.61 billion in 2024 and is expected to grow from USD 61.49 Billion in 2025 to reach USD 158.90 billion by 2033, growing at a CAGR of 12.6% during the forecast period (2025-2033). Factors such as reduction in battery prices and technological advancements with proactive government initiatives, significantly drives the demand for electric bus industry.
Due to the growing concerns about greenhouse emissions and the adverse effects of such emissions on the environment, the evolution of electric vehicles is proving to be the most amazing gift from humans to nature that reduces the carbon and other hazardous emissions into the atmosphere. The global electric bus market share has shown great growth in the past few years, as various governments across the world are utilizing electric vehicles for their public transport system. Along with this, the increase in demand for fuel-efficient vehicles with high performance and low emissions is driving the electric vehicles market in a forward direction.
Market Growth Factors
Increase in demand for fuel-efficient, high-performance and low emission buses driving global market
Petrol and diesel, which are used as the primary fuel for nearly every vehicle out there, are not renewable sources of energy and will soon get exhausted with time. Both these being gasoline fuels have high performance, but in turn, the hazardous emissions are released into the atmosphere. To support sustainable development, there was a need to find alternative sources of fuel, which led to the evolution of electric vehicles. Electric buses do not use gas or any gasoline fuels, which is why these buses are more economical than conventionally fueled buses.
An electric bus converts over 50% of the electric energy from the grid power at the wheels, which is way better than gasoline-fueled vehicles. The demand for electric vehicles has increased with the high performance offered by the vehicle with high fuel efficiency. At one full charge, an electric bus can travel up to 150kms distance, which is way more than the public or the transportation governance expects. With all these things to concern, the low emission from such electric buses is driving the attention of people as it satisfies the pollution friendly need of the time.
Reduction in battery prices boosting the market growth
The electric buses, when operating on electricity, can’t be operated continuously on an AC power supply, all such vehicles operate on a DC power supply. For this, batteries are used in the electric buses that power the entire vehicle along with all the accessories inside the bus. The electric buses operate entirely on batteries. The cost of batteries was a key concern for the transport authorities, as the cost of an electric vehicle’s battery was way higher, and it plays an important part in the overall cost of an electric bus.
Hence the battery packs are considered an important cost component that eventually affects the market growth. But now, the prices of electric vehicle batteries have drastically gone down with the technological advancements in the electric vehicles segment. This is proving to be another driving factor for the global electric bus market growth, as the main cost component for an electric bus is available at minimal cost and, in turn increases the purchase quantity.
Market Restraints
High manufacturing cost along with serviceability is proving to be an obstacle to the growth of the market
Electric buses are not yet manufactured in mass production as the need and demand for electric buses are limited to certain regions globally. Most electric buses are operating in the European region, especially in Turkey, where the famous Turkish Buses are operating. But still, Europe doesn’t have a mass production facility to manufacture electric buses on the go.
This is why a huge cost component affects the entire market, which makes the electric buses comparatively costlier than the conventional buses that run on fuels. Along with this, the unavailability of proper infrastructure to manufacture an electric bus and the high amount of investments involved are having a negative impact on the growth of the market.
Serviceability is another concern with the electric buses that can hamper growth of the market. The limited number of charging stations and the time required for fully charging an electric vehicle may discard people’s interest in buying electric vehicles. The conventional buses that run on gasoline fuels get refueled in couple of minutes, which saves plenty of time for the passengers as well as the transportation authority.
But when considered the same with an electric bus, people will become furious with the time taken to re-energize the batteries to their full level. This can hamper the growth of the global market and can witness a slight decline in the revenue if not solved at a front pace.
Market Opportunities
Technological advancements with proactive government initiatives create huge opportunities in the global market.
The current era is dominated by technology, and when it comes to electric vehicle technology, it is continuously evolving. There have been mass technological changes in electric vehicles since their introduction to the market in 2010. The battery capacity increased performance, and efficiency, designs and aesthetics, IoT connected buses, fleet systems, etc. are some of the technological advancements in the electric vehicle segment in recent years. Coming years ahead might see more favorable changes as far as technology is considered, which has opened a wide range of opportunities in the Research & Development, Manufacturing, Electric technology, Artificial Intelligence in electric buses, fleet management services, etc.
Apart from the technological opportunities, the favorable policies of various governments are playing a key role in the growth of the market for electric bus. Government offers subsidies to keep the final vehicle cost as low as possible, offers tax–relaxation, and policies that will enhance the electric vehicle segment. Even manufacturing plants for electric vehicles get many benefits from the government, starting from land acquisition to tax relaxations. This is why the electric vehicle market is a hot topic at this point in time, as it is offering a once-in-a-lifetime chance to earn and create a revolution in the automotive industry.
Regional Analysis
The asia-pacific: dominant region with a cagr of 12%
The Asia-Pacific region dominating the global market is anticipated to reach a CAGR of 12%. The Asia-Pacific region is the major economy globally and has favorable conditions for the manufacturing and distribution of electric vehicles. Many countries in the region have started utilizing electric buses for their public transport, and governments are also availing special benefits and tax relaxations with subsidies for electric vehicle manufacturing. This is why the Asia-Pacific region is leading the global market, with the presence of major countries like India, China, Japan, South Korea, etc.
Europe: growing region with a cagr of 12.5%
Europe is the second most dominating region after the Asia-Pacific, with a market size that will be projected to grow at a CAGR of 12.5%. Europe is known as an automotive hub and has the highest number of electric vehicle manufacturing units. Many European countries utilize electric buses for their public transportation, which is why the region is fuelling the global market.
North America is the third region in the list of dominant regions in the global market and it will be anticipated to reach a CAGR of 12%. Various initiatives taken by the governments of the countries in North America encourage the adoption of electric transit buses that are now used in the public transport system in various countries, including the US, Canada, Mexico, etc.
The Middle-East and Africa region is the region with the least revenue generation, accounting for a market size that will grow at a CAGR of 12.3%.
Segmental Analysis
By propulsion type
The global electric bus market share is primarily segmented by propulsion type and power output. The propulsion type is further classified as BEV (Battery Electric Vehicle), Fuel Electric Vehicle (FCEV), or plug-in hybrid electric vehicle (PHEV). Out of these, the battery electric vehicle has a major share in the market with USD 12567 million in 2021 and is expected to grow to USD 37155 million by 2030 at a CAGR of 13%.
The battery-electric vehicle operates with the help of an electric motor that is charged up with the batteries connected. In most of the electric buses in use, the batteries can recharge with regenerative braking that assists the vehicle in slowing and recovering the energy converted to heat by the brakes. The BEVs are getting high demand in the market for electric bus with the advantages associated with it.
The next classification is Fuel Electric Vehicle (FCEV), which has a subsequent market prediction to grow at an impeccable CAGR of 18% by 2030 with an estimated market share of USD 1438 million. These vehicles include batteries as well as a hydrogen cell in a hybrid architecture for the efficient operation of the bus. The next classification is called a Plug-in hybrid electric vehicle, which uses an electric motor and battery connected together and plugged into a power grid system to charge the battery.
It is also powered by an IC engine which may be used to recharge the batteries. The said segment shares a pretty decent market value, growing at USD 6244 million by 2030 at a CAGR of 14%.
By power output
The second segmentation for the global market is by power output, which is further segmented as up to 250 kW and above 250kW. Out of which upto 250 kW power output vehicles dominates the market share with USD 27851 million by 2030 at a CAGR of 12%. All the electric buses with less than or equal to 250 kW are considered in this category. The said segment is leading the market with a decent performance at an affordable price.
The second category of the power output segmentation is ‘above 250kW’, which has its anticipated market value of USD 17258 million by 2030 at a CAGR of 14%. All the electric buses with a power output of more than 250 kW are considered in this category. The said segment is expected to grow at a rapid pace with an increase in demand for high-performing electric buses.
