Electric buses are equipped with an advanced battery technology that powers the electric motor integrated into the vehicle to operate for long ranges. Electric buses provide zero-emissions, lower operating costs, and enhanced passenger experience compared to conventional buses. The key components of an electric bus include high-capacity batteries, electric motor, charger, and power electronics controller. Electric buses offer numerous benefits such as low noise levels, reduced CO2 emissions, energy efficiency, and low maintenance costs. The increasing fuel costs and stringent emissions norms have compelled transit agencies globally to incorporate electric buses into their fleets. The Global Electric Bus Market is estimated to be valued at US$ 14,795.5 Mn in 2024 and is expected to exhibit a CAGR of 13.% over the forecast period 2023 to 2030.
Key Takeaways
Key players operating in the Electric Bus Market are AB VOLVO, CAF, CONSTRUCCIONES Y AUXILIAR DE FERROCARRILES, S.A., ANKAI BUS, ZHONGTONG BUS HOLDINGS CO., LTD, BYD COMPANY LTD, PROTERRA, DAIMLER AG, YUTONG GROUP, NFI GROUP INC. and VDL GROEP BV. These players are focusing on developing advanced lithium-ion batteries with high energy density and longer lifecycles to provide longer range per charge.
The growing concerns regarding environmental pollution and stringent emission norms are compelling transit agencies globally to adopt zero-emission electric buses. Various countries are providing substantial subsidies for the adoption of electric buses, creating significant growth opportunities for market players.
Technological advancements in battery technology, such as solid-state batteries and graphene batteries, are expected to enhance the driving range and energy capacity of electric buses. OEMs are heavily investing in R&D activities to develop lithium-ion batteries integrated with advanced chemistries providing higher energy density.
Market Drivers
Growing environmental concerns regarding emissions from public transport such as conventional buses is a major factor propelling the electric bus market’s growth. Stringent emission regulations and norms imposed by governments globally to reduce carbon emissions are compelling transit agencies to adopt electric vehicles. Various nations worldwide are offering subsidies and favorable policies to promote zero-emission public transport. This is creating a positive business case for electric bus adoption and significantly driving their sales.
Current challenges in the electric bus market:
The electric bus market is still at a nascent stage and faces several challenges currently. The high upfront costs of electric buses compared to conventional diesel buses is a major hurdle in widespread adoption. The higher cost is due to expensive lithium-ion batteries used which make up almost 50% of the bus cost. Developing low-cost yet high-performance batteries is crucial for lowering electric bus prices. Another challenge is developing widespread charging infrastructure. Cities and transport authorities need to install hundreds of chargers at depots and terminals to power electric fleets. This requires substantial upfront investment. Operators also have range anxiety due to limited battery capacities. Educating users about benefits will help drive adoption.
SWOT Analysis
Strength: Zero tailpipe emissions help improve air quality and reduce carbon footprint. Lower maintenance and fuel costs compared to diesel buses help gain lifecycle cost savings.
Weakness: High upfront capital costs of buses and charging infrastructure act as a barrier. Limited battery capacities result in range anxiety.
Opportunity: Growing preference for electric mass transit to meet sustainability goals offers huge market opportunity. Technological advances can help lower costs and improve performance over time.
Threats: Dependence on fluctuating lithium-ion battery prices. Delays in setting up charging networks can hamper large-scale integration.
Geographical regions with concentrated electric bus market value
China dominates the electric bus market currently, accounting for over 80% of the global fleet. This is due to strong policy pushes and subsidies by the Chinese government to boost adoption of electric vehicles for commercial use. Chinese cities like Shenzhen have completely electrified their bus fleets. Europe is another major regional market led by countries like Germany, France and the UK. Cities in these nations are strongly encouraging switching to electric buses to meet climate targets.
Fastest growing region for the electric bus market
North America is projected to witness the highest growth in demand for electric buses over the forecast period. Several states and cities have announced plans to completely transition their bus fleets to electric by 2030-2040. Major initiatives like the Green City Fleet Program in California will drive the market. Countries like the US, Canada are raising funds to develop charging infrastructure which will facilitate large-scale integration of electric buses. Transport authorities are also offering incentives and subsidies to tilt operators towards electric options.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
