Electric Bus Market

The global Electric Bus Market is valued at USD 49.88 Billion in 2023 and is projected to reach a value of USD 178.2 Billion by 2032 at a CAGR (Compound Annual Growth Rate) of 15.2% between 2024 and 2032.

Key highlights of Electric Bus Market

• In 2023, the Asia Pacific region accounted for the highest revenue share accounting for 80.6% of the market.
• The North America market is expected to grow significantly from 2024 to 2032 with a CAGR of around 17.1%.
• This indicates that the North America market will experience substantial expansion in terms of Electric Bus demand and revenue generation during the projected timeframe.
• In 2023, the BEVs segment accounted for major market growth and contributed more than 91.1% of the total revenue share.
• Based on Consumer, the government segment accounted for the market share of about 82.7% in 2023.
• Based on Application, the intracity category accounted for the market share of about 88.2% in 2023.
• In 2023, based on Battery Type the Lithium- Iron- Phosphate segment dominated the market with a 65.4% share.

Electric Bus Market: Regional Overview

In 2023, the Asia Pacific region solidified its position as a powerhouse in the Electric Bus market, commanding an impressive revenue share of 80.6%. China has become the world leader in e-bus technology, which primarily explains its dominance, holding more than 95% of the worldwide e-bus stock. A remarkable statistic was disclosed by China's Ministry of Transport at the close of 2022: As "new energy vehicles," which include plug-in hybrids, pure electric cars, and fuel cell vehicles powered by alternative fuels like methanol and hydrogen, they account for 77% of all urban buses in the nation. Around 84% of this new energy bus fleet consisted of electric vehicles.

China's exceptional progress extends beyond bus adoption. By 2022, it had erected the world's most extensive EV charging infrastructure, boasting 1.8 million public charging stations and 3.4 million private equivalents. With an average of one charging pillar per 2.5 of China's 13.1 million new energy vehicles, the country has effectively addressed charging accessibility, fostering further e-vehicle adoption.

While China leads the charge, India has embarked on its ambitious journey toward electrification. Introduced in 2022, the National Electric Bus Program (NEBP) intends to construct an extra 50,000 Electric Buses within five years. The finance for this program comes from a significant investment of USD 10 billion (Rs820 billion). Despite these attempts, only a little has altered. The finance for this program comes from a substantial investment of USD 10 billion (Rs820 billion). Despite these attempts, only a little has altered. As of May 2023, out of India's total registered bus fleet of 359,432 since the inception of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme in April 2015, only a mere 1.25%—equivalent to 4,506 buses—are electric.

The burgeoning dominance of the Asia Pacific region, fueled by China's monumental strides and India's aspirations, underscores the transformative potential of Electric Buses in reshaping urban transportation landscapes and advancing towards sustainable mobility solutions.

U.S. Electric Bus Market Overview

The U.S. Electric Bus market is on a steady growth trajectory, having reached a valuation of USD 3.5 billion in 2023 and projected to hit approximately USD 17.67 billion by 2032, reflecting a noteworthy Compound Annual Growth Rate (CAGR) of 19.71 % from 2024 to 2032. Governments in the United States and Canada are actively strategizing to establish advanced charging infrastructure nationwide. In June 2023, the Federal Transit Administration (FTA) allocated around USD 182 million, fostering 49 Electric Bus projects spanning across 46 states. The FTA's Low-No Program, a part of the US Department of Transportation, aims to support transportation entities in procuring or leasing electric and hydrogen buses, as well as other vehicles incorporating eco-friendly technologies and fuels. These programs support the region's general development of sustainable transportation options in addition to encouraging the usage of Electric Buses. Due to advantageous government rules and major investments, the U.S. Electric Bus market is anticipated to rise rapidly in the following years.

The global Electric Bus market can be categorized as Type, Consumer, Application, Bus Type, Vehicle Range, Battery Capacity, Power Output, Battery Type, Component, Seating Capacity, Autonomy, and Region.

Electric Bus Market: Type Overview

In 2023, the BEVs segment dominated the market with a 91.1% share. Based on the Type, the market can be categorized into BEVs and FCEVs. BEVs rely entirely on electricity in their batteries to operate, making them fully environment-friendly and efficient alternatives to traditional diesel and petrol buses. Their dominance indicates a strong consumer preference and government public transport boards and private travel agencies for this technology. Factors such as environmental concerns, government incentives, and advancements in battery technology likely contribute to the popularity of BEVs in the market. As a result, manufacturers and stakeholders in the Electric Bus industry may focus more on developing and promoting BEV models to meet the growing demand for sustainable transportation solutions.

Electric Bus Market: Consumer Overview

The Electric Bus industry experienced significant growth in 2023, with a notable dominance of the government segment, which held a market share of more than 82.7%. The Consumer segment is divided into Private and Government. In collaboration with state and federal governments, government organizations, such as city councils or transportation authorities, often invest in Electric Buses to reduce carbon emissions and promote sustainable transportation. For instance, For the production and installation of 150 hydrogen and 1400 electric transit buses in the country, the German Government has invested EUR 642 million. By choosing Electric Buses over traditional ones, governments can achieve their net zero targets faster way. Additionally, governments may prioritize investment in public transportation infrastructure, including Electric Bus fleets, to improve urban mobility and address environmental concerns. Overall, the strong presence of the government segment underscores the importance of public-sector involvement in shaping the future of transportation towards more sustainable alternatives like Electric Buses.

Electric Bus Market: Application Overview

The Electric Bus industry grew considerably in 2023, with the intracity category emerging as a dominant force. This application segment demonstrated exceptional market control, capturing a substantial market share of over 88.2%. The Application segment is divided into Intercity and Intracity. This trend is primarily fueled by the pressing need for clean mobility solutions in rapidly urbanizing areas. With cities experiencing a surge in population, there's a growing demand for efficient urban transportation, presenting a vast opportunity for electric mobility solutions. Major players in the industry, including BYD, Proterra, AB Volvo, and Ebusco, are actively offering Electric Buses tailored for intracity applications. For instance, King Long introduced its K06-XMQ6001 Electric Bus with features specifically designed to enhance intracity transport. Similarly, Nova Bus secured a substantial order from the Chicago Transit Authority for 600 Electric Buses for intracity operations. Asia Pacific emerges as a frontrunner in the intracity Electric Bus segment, primarily driven by stringent emission regulations and in-city restrictions. Notably, countries like India are making significant strides in adopting sustainable mobility solutions. For example, the Maharashtra State Road Transport Corporation plans to replace 15% of its fleet with Electric Buses, amounting to 2,700 buses from its total fleet of 18,000. These proactive initiatives across the region are anticipated to propel the growth of the Electric Bus market in the intracity segment in the coming years.

Electric Bus Market: Battery Type Overview

The Electric Bus industry experienced significant growth in 2023, with a notable dominance of the Lithium- Iron- Phosphate segment, which held a market share of more than 65.4%. The Battery Type segment is divided into Lithium- Nickel- Manganese- Cobalt-Oxide, Lithium- Iron- Phosphate, and Other Battery Types. This indicates a strong preference for and adoption of lithium-ion-phosphate batteries by the EVs manufacturers and operators. LiFePO4 batteries are increasingly adopted due to their superior performance, durability, and safety features compared to other battery types. With technological advancements and rising production due to the growing demand, Lithium-ion-phosphate batteries are cheaper and accessible, driving their widespread adoption in the Electric Bus sector. The dominance of Lithium-ion-phosphate batteries highlights the increasing importance of governments for sustainable transportation solutions and the transition towards cleaner and safer energy sources. Manufacturers and stakeholders in the Electric Bus market will likely favor Lithium-ion-phosphate batteries due to their proven reliability and efficiency in powering electric vehicles. Innovation of battery technology and energy storage capacity is foreseen to make Lithium-ion-phosphate batteries more useful and durable, enabling them to compete better in the Electric Bus market as markets continue to expand.

Key Trends

1. The global trend towards electric buses is gaining momentum, buoyed by robust national and local policies targeting air pollution reduction. These policies encompass a range of measures, such as competitive tenders, green procurement programs, purchase subsidies, and support for charging infrastructure. Notably, India's Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme earmarks USD 1.4 billion over three years from 2019 to accelerate the adoption of 1.6 million hybrid and electric vehicles, including buses. This initiative promotes the transition to Electric Buses and fosters domestic manufacturing of EVs and their components, indicating a promising trajectory for the Electric Bus market.
2. The electric bus market is rapidly evolving with technological advancements focused on faster charging, enhanced battery technologies, fuel cell integration, and autonomous capabilities. Manufacturers are pushing the boundaries of battery efficiency and lifespan, enabling quicker charging times and extended operational ranges. Fuel cell buses are gaining traction, offering zero-emission alternatives with longer ranges and faster refueling than traditional electric buses. Moreover, integrating autonomous technology revolutionizes public transportation, promising safer and more efficient journeys. These trends signify a shift towards more sustainable and innovative solutions in the electric bus market, catering to the growing demand for eco-friendly urban transportation options while advancing towards a greener future.
3. Increasing government initiatives and investment in promoting sustainable transport options are the crucial trends shaping the driving of the Electric Bus market. In 2022, the United States Department of Transport and Federal Transit Administration distributed 1.7 billion dollars from the Bipartisan Infrastructure Act to 46 states and territories to enhance sustainable transportation in the country. Pollution control agencies and government bodies across the globe are working on adopting Electric Buses to reduce carbon emissions and improve air quality, emerging as a possible solution.

Premium Insights

The Electric Bus market is undergoing a significant transformation driven by various factors, including cost reductions, favourable policies, and environmental concerns. Electric Buses is predicted to reach prices comparable to diesel-fueled buses as they become more and more financially cheaper. They offer considerable savings in maintenance and operating costs, cutting down expenses by 81-83% compared to diesel buses. Governments worldwide incentivize their adoption through various initiatives, promoting a supportive policy landscape. Projections suggest a rapid uptake of Electric Buses, with estimates showing that by 2030, 84% of new municipal buses sold could be electric. The growing focus on zero-emission vehicles and the rising environmental awareness of consumers and governments contribute to this trend. In regions like Latin America, partnerships with Chinese manufacturers drive the adoption of Electric Buses, with significant investments being made to electrify bus fleets. Businesses can profit from this industry's strong potential to meet the increasing consumer demand for sustainable transportation options while bringing financial and social rewards.

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Market Dynamics

The expanding carbon dioxide, hydrocarbons, and greenhouse gasses (CHG) emanations have incited an eminent move towards Electric Buses driven by several components. Stringent environmental regulations around the world thrust for cleaner transportation alternatives. Furthermore, the developing concern over air quality and public health encourages the selection of electric vehicles. Thirdly, technological progressions in battery innovation have progressed Electric Buses' vehicle life and performance, making them more competitive with conventional petrol and diesel buses. Government incentives and appropriations to promote sustainable transport solutions encourage support for the Electric Bus Industry. The rising awareness among customers and organizations about the benefits of decreasing carbon footprints contributes to the expanding demand for Electric Buses as an eco-friendly alternative.

Hydrogen fuel-cell innovation offers several advantages over conventional battery Electric Buses, including longer driving ranges and quicker refueling times. As mega-cities worldwide aim to decrease emissions and improve air quality, hydrogen fuel-cell Electric Buses emerged as a practical solution, particularly for long-distance routes or areas lacking proper charging infrastructure. Also, hydrogen fuel-cell buses emit zero emissions at the tailpipe, contributing to sustainability goals. Besides, hydrogen generation and storage technology advancements are making hydrogen fuel more accessible, practical, and cost-effective. Growing investments due to supportive government activities resulting in advancing hydrogen infrastructure, the Electric Bus industry will find this opportunity helpful to extend its offerings and cater to the increasing demand for clean and effective public transportation solutions.

The high cost of developing charging infrastructure poses a significant challenge for the Electric Bus industry. Charging infrastructure includes the expenses of setting up the required infrastructure for charging Electric Buses. Unlike traditional buses that depend on fuel stations, Electric Buses require charging stations, which must be strategically located to ensure efficient operations. These charging stations demand considerable investments in station equipment, such as chargers and power distribution systems, and the installation of necessary infrastructure like electrical connections and physical structures. Factors like land acquisition, permits, and regulation compliance further inflate costs. This financial burden can be daunting for bus operators and municipalities, especially considering budget constraints. Overcoming this challenge requires innovative financing models, collaboration between stakeholders, and government support to incentivize the development of charging infrastructure, ultimately making Electric Buses a more viable and sustainable transportation option.

Competitive Landscape

In the Electric Bus industry, major players include Zhengzhou Yutong Bus Co., Ltd., AB Volvo, BYD Company Ltd., Dongfeng Motor Company, Proterra Inc., CAF Group, VDL Groep Competition is driven by factors like regional presence, new product launches, and pricing strategies. In January 2023, GreenCell Mobility Ltd secured a contract with the Delhi government's transport department to introduce 570 Electric Buses over two years. Ashok Leyland's EV division introduced the EiV12 Electric Bus platform in June 2022, offering two variants—EiV 12 low floor and EiV 12 standard—focusing on reliability, range, and comfort. These developments indicate a dynamic market where companies vie to meet demand while innovating to stay competitive.

The key players in the global Electric Bus market include - Tata Motors (India), Daimler AG (Germany), Geely Automobiles Holdings Ltd. (China), Man SE (Germany), Scania AB (Sweden), AB Volvo (Sweden), BYD Company Ltd. (China), Dongfeng Motor Company (China), Zhengzhou Yutong Bus Co. Ltd. (China), Proterra Inc. (U.S.), CAF Group (Spain), VDL Groep (Netherlands) among others.

Recent Market Developments

• In January 2023, Daimler received an order to supply 45 buses to VLP Transport for intercity transport.
• In February 2023, The contract for the supply of 97 Volvo 7900 S Charge buses was signed by AB Volvo with Belgium's transport operator, OHIMOTWonie. More than 25 countries are now covered by the Volvo 7900 SCharge bus. It doesn't require charging infrastructure because it continuously generate
• In January 2022, The San Clara Valley Transportation Authority is installing an innovative microgrid and electric vehicle charging system with Proterra and Scale Microgrid Solutions in Santa Clara, United States. This project will demonstrate how clean energy combined with fleetscale EV charging can allow the deployment of fully electric vehicle fleets expected to come online in late 2023, which will contribute to VTA's further reduction of greenhouse gas emissions.
• In September 2022, The Urbino 18 model, which is capable of covering 350 km in a single fill with passenger capacity of 138 seats, has the latest hydrogen fuel cell that helps to commute from point A to point B.