Electric Bus Market: Information by Vehicle (Battery, Plug-In, and Hybrid), Consumer (Public and Private), and Region—Forecast till 2029

Feb 25, 2021   Electric buses can continuously store or feed energy from an external source and do not have a traditional ICE engine for propulsion. E-bus is driven by an on-board electric motor that receives power from a battery or set of batteries. If electricity is not present on board, energy is supplied through external energy sources. For example, some electric buses have overhead cables, such as trolleybus or on-line electric cars with non-contact drivers on the ground. E-buses are eco-friendly and econ...
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Electric buses can continuously store or feed energy from an external source and do not have a traditional ICE engine for propulsion. E-bus is driven by an on-board electric motor that receives power from a battery or set of batteries. If electricity is not present on board, energy is supplied through external energy sources. For example, some electric buses have overhead cables, such as trolleybus or on-line electric cars with non-contact drivers on the ground. E-buses are eco-friendly and economical compared to traditional gasoline/diesel buses.

The rise in electric buses can alter the charging infrastructure deployment, ownership cost, energy use, carbon dioxide emissions, and battery material demand. The global EV launch includes plans to deploy over 500 different EV models by 2022. Compliance with regulatory norms, consumer choice, and competitive pricing are considered vital in attracting new buyers to the market. Passenger electric vehicle sales were at 2.1 million in 2019 and are projected to observe a drip in 2020 due to coronavirus pandemic outbreak before continuing to rise during the forecast years.

China is the leading electric vehicle market with more than 70,000 units ordered. China has a market share of more than 25% of the world's commuter buses. The global hybrid and electric transit bus industry are expected to be driven by Chinese manufacturers, such as Yutong, Wuzhoulong, Foton, Kinglong, and BYD, with non-Chinese manufacturers Volvo, ADL, and Daimler. China announced to provide subsidies to 2 million vehicles per year from 2020 to 2022. It will be available for vehicles with a price range below 300000 Yuan (USD 42,500).

The global electric bus market is projected to be valued at USD 137,347.86 million in 2027 and is projected to grow at a CAGR of 7.99% during the forecast period. The fleet size is expected to increase by 935 thousand units by 2027 from 137 thousand in 2019.

Impact of COVID-19

COVID-19 has severely impacted several industries worldwide. The automotive industry was also severely impacted due to the limited sale of new products during the pandemic. The production lines of automotive industries were also disrupted owing to government-induced lockdown and social distancing norms. However, the automotive market is expected to grow at a significant CAGR in the post-COVID-19 scenario.

Reduced Carbon Emissions and Long-Term Benefits to Drive the Market Growth

The rising adoption of electric vehicles worldwide encourages regional manufacturers to expand their reach into the international market. The collaboration of regional level manufacturers with global companies is expected to drive the electric bus market growth. Another major driving factor of the electric bus market recently is the air pollution caused due to vehicles running on conventional fuel. It has compelled worldwide regulators to encourage the use of low emission vehicles.

Natural gas-based vehicles are the biggest competitor of EVs to cope with air pollution, but electric buses are more reliable due to their near-zero carbon dioxide emissions. Countries looking to curb their crude oil import bills are looking towards adopting electric vehicles, bolstering the market demand. Electric buses require low operating costs as compared to conventional buses.

As governments and public transport authorities focus on long-term environment-friendly, cost-effective, soundless, and low maintenance vehicles, electric buses seem to be the best solution, contributing to the overall market growth. Major economies across the world have launched Electrical Vehicel Initatives (EVI) under Clean energy ministerial in which currently 15 countries are participating including, China, Chile, Canada, France, Finland, Germany, Japan, India, the Netherlands, Norway, New Zealand, Portugal, Poland, and the U.K.

The High Purchase Cost and Limited Awareness Can Hinder the Market

The initial cost of electric buses is higher compared to their conventional buses. The premium pricing is expected to limit adoption in low-income countries. The lack of awareness of electric vehicles' benefits over conventional ones, lack of charging infrastructure, and limited resources are expected to hinder the market growth. However, rapid urbanization and a growing population can bolster the market during the forecast period.

A Next-Generation Sustainable Transportation Solution and Upliftment of Under-Served Communities in the Future

Transportation accounts for more than 50% of global warming emissions in the U.S. and one of the largest contributors of the worldwide climate change. Electric vehicles powered by clean electricity have the lowest emissions compared to any other vehicle technology. The clean air benefits from electric vehicles are expected to grow during the forecast period. Battery-powered electric vehicles and buses have a range above 100 miles.

Fuel cell buses have long ranges above 200 miles. These vehicles cost high at the time of purchase but offer reduced fuel and maintenance costs leading to a reasonable total cost of ownership. Electric buses are eco-friendly, smooth, and quiet in operation.

The heavy-duty electric bus market is expected to generate good jobs in the future. Some leading manufacturers in California pay assemblers USD 13–20/hour for entry-level positions, which is higher than the traditional pay for assembly jobs. Increased investment in readily accessible training programs is anticipated to spur the growth of well-paying jobs, even in low-income communities during the forecast period.

Steady Decline in Plug-in Buses Sale

The plug-in hybrid school bus started in 2003 in Raleigh, North Carolina when Advanced Energy Inc. began working with the regional manufacturers. The buses reduced 70% fuel usage but in specific conditions, reducing its sale.

Zero-emission buses with pure battery-electric models are expected to dominate the market during the forecast period. In 2017, McKinsey estimated the cost of electric cars' battery pack at USD 100/kWh and expected to cost USD 190/kWh by 2020. A battery-electric vehicle is 85–90% efficient. The plug-in hybrid is rapidly losing market share and fuel cell electric buses account for a small fraction of the market and fail to offer the same total ownership cost benefit as battery-electric buses.

Due to subsidy phase-out and the increasing saturation of electric buses in Tier 1 cities, the electric bus sales in China can stabilize at a lower level after the worst decline in 2020 from the COVID-19 pandemic. While Chinese OEMs will no longer receive large subsidies in China (amounting to billions of dollars), the support has already established a world-beating cost base and technology, spreading to other countries.

Europe sold over 1800 electric buses in 2019, up from around 750 in 2018, with BYD and Yutong as top suppliers. As the Chinese electric bus market saturates, it expects to see an increased presence of Chinese bus OEMs in other bus markets globally.

Hybrid buses are slowly gaining traction in the global market and are projected to grow at a significant CAGR. For example, the United States Department of Energy (USDOE) recently announced the selection of Navistar Corporation for a cost-shared award of up to USD 10 million to develop, test, and deploy plug-in hybrid electric (PHEV) school buses. The project aims to deploy 60 vehicles for three years in school bus fleets across the nation. Navistar will examine a range of hybrid architectures and evaluate advanced energy storage devices, to develop a vehicle with a 64 km electric range.

High Adoption of Electric Buses for Public Transportation

Due to the high amount of carbon and other gaseous emissions from public transportation vehicles, governments are encouraging the adoption of eco-friendly cars and buses. The target of running 100% electric vehicles in public transport by 2030 appears to be a challenge as replacing conventionally fueled vehicles may be unconvincing to many. Therefore, the Government of India (GOI) has launched the Green Urban Transport Scheme (GUTS) and Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (FAME) to promote the adoption of electric mobility in the country. The scheme proposes establishing a Unified Metropolitan Transport Authority and an Urban Transport Fund and implementing transit-oriented development.

The private segment is projected to grow at a significant CAGR over the forecast period. Governments worldwide are promoting pilot projects to run private electric buses resulting in high margins for operators. The Indian government authorities have also announced a pilot project to foreign investors in India to run their buses on electricity.

The Bengaluru Metropolitan Transport Corporation is looking for private players to run electric buses in the state. According to ET, the transport corporation wants to take the public-private partnership route to procure 150 electric buses. BMTC is inviting private operators to operate electric buses in the city based on certain conditions under the incentive under its 'Faster Adoption and Manufacturing of Electric Vehicles' (FAME) Scheme.

Asia-Pacific Market to Hold Significant Market Share

Asia-Pacific held the largest market share in 2019 and is projected the observe a significant CAGR during the forecast period owing to the increasing adoption of electric bus fleets in China and India. India recorded a sale of 600 electric buses in 2019–2020, amounting to 50% growth over 2018–2019.

In 2020, Electra-BYD, a Hyderabad-based manufacturer of electric buses, received order for 765 electric buses in India. The company is planning to set up its second electric bus manufacturing plant in North India to provide electric buses at the lowest possible rates. In August 2019, the Government of India sanctioned 5095 electric buses for 64 states for intracity commuting, 400 e-buses for intercity operations, and 100 e-buses for last-mile connectivity Delhi Metro Rail Corporation.

The North American market is projected to grow significantly over the forecast period. Regions such as California, New York City, and Seattle are investing heavily in zero-emission fleets. California has been proactively working on its commitment to shifting to 100% all-electric transit buses by 2040. It has made it mandatory for all the large transit agencies to purchase 25% electric buses starting in 2023 and 50% by 2026.

Key Players

  • BYD Co. Ltd.
  • Yutong
  • Proterra
  • VDL Groep
  • AB Volvo
  • Daimler AG
  • New Flyer Industries
  • Scania AB
  • Iveco
  • Ankai
  • Optare
  • Ebusco
  • EURABUS GmbH
  • Karsan
  • Mitsubishi Heavy Industries, Ltd

Recent Developments

  • On February 3, 2021, Turkey launched its first indigenous self-driving electric bus, Karsan Atak Electric, in Romania.
  • On January 29, 2021, Olectra Greentech an electric bus manufacturer, and its sister company, Evey Trans Private Limited received an order of 350 electric bus from PuneMahanagar Parivahan Mahamandal Ltd.

Electric Bus Market: Segmentation

By Vehicle Type

  • Battery
  • Plug-In
  • Hybrid

By Consumer

  • Public
  • Private

By Region

North America

  • The U.S.
  • Canada
  • Mexico

Europe

  • Germany
  • The U.K.
  • Italy
  • France
  • The Rest of Europe

Asia-Pacific

  • China
  • South Korea
  • Taiwan
  • India
  • Singapore
  • Japan
  • Malaysia
  • Indonesia
  • The Rest of Asia-Pacific

Latin America

  • Brazil
  • Argentina
  • The Rest of Latin America

The Middle East and Africa (MEA)

  • Saudi Arabia
  • South Africa
  • The Rest of MEA

Frequently Asked Questions (FAQs)

The global electric bus market is projected to be valued at USD 137,347.86 million in 2027 and is projected to grow at a CAGR of 7.99% during the forecast period. The fleet size is expected to increase by 935 thousand units by 2027 from 137 thousand in 2019.
The rising adoption of electric vehicles worldwide, increase collaboration of regional level manufacturers with global companies, rapid urbanization and a growing population are the key factors expected to drive Electric Bus Market during the forecast period.
Asia Pacific is expected to hold the highest market share in Electric Bus Market.
BYD Co. Ltd., Yutong, Proterra, VDL Groep, AB Volvo, Daimler AG, New Flyer Industries, Scania AB, Iveco, Ankai, Optare, Ebusco, EURABUS GmbH are the top players in Electric Bus Market.
In 2027 Global Electric Bus Market was valued at USD 137,347.86 million.
Public Consumer Segment is expected to be the leading segment in Electric Bus Market during the forecast period.
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