The electric bus market worldwide size was valued at USD 18.6 billion in 2023 and is expected to reach USD 48.1 billion by 2030, with a CAGR of 14.5% from 2023 to 2030. The market is driven by factors such as demand for zero-emission vehicles, growing environmental concerns, and government initiatives promoting sustainable transportation drive the electric bus market.
Electric Bus Market Growth Dynamics
DRIVER: Rising GHG emissions
Vehicle emissions are responsible for discharging around 29% of ozone-depleting substances that cause air pollution, with the transport sector being the largest contributor to greenhouse gas (GHG) emissions. Many countries have announced goals to reduce GHG emissions, compelling bus manufacturers to adopt electric solutions. The Colorado emission reduction target in the US was established in 2019. It has targeted a 26% reduction by 2025, a 50% reduction by 2030, and a 90% reduction by 2050, with its 2005 levels as the baseline. Germany has set the target for achieving at least 65% less carbon emission from its 1990 level by 2030. The Netherlands, one of the frontiers in adopting electric buses, already has more than 25% of electric public buses in its daily operations and aims to have its entire public bus transport emission-free by 2030. This is expected to boost the electric bus market further.
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OPPORTUNITY: Transition toward hydrogen fuel-cell electric mobility
Fuel cell electric vehicles (FCEVs) use pure hydrogen as their fuel, with residues being only water and heat. Hence, these vehicles emit no harmful substances, such as GHG and particulate matter. Fuels like diesel and gasoline emit GHGs, such as CO2, CO, NOx, and hydrocarbons (HC). These gases and particulate matters lead to climate change and global warming. Hence, using hydrogen power for transportation and commercial and industrial purposes would reduce GHG emissions significantly.
LFP is expected to be the fastest-growing battery type for electric buses.
The LFP batteries are low-priced and have higher thermal stability than NMC batteries. They are widely used in high-performance electric buses, offering a high current rate, optimum thermal stability, and long cycle life. These batteries are also preferred for long-haul buses as they can accommodate heavy battery packs built with low-density cells and offer the required range. In addition, these batteries show better efficiency at lower temperatures than the other battery types. The only challenge with this battery type is that they have lower energy density than NMC and NCA batteries. Considering the price-sensitive market, the Asia-Pacific is expected to be the most promising market for these batteries. Many Chinese OEMs are incorporating LFP batteries in their electric buses. Some of the examples are Yutong E12, BYD K9, Zhongtong Bus LCK6125EVG, King Long XMQ6127EVG, Tata Ultra, Ashok Leyland Circuit, Olectra BYD eBuzz K9, JBM ECO LIFE, and others. Considering the promising benefits offered by this battery chemistry and their low cost, this market is the fastest growing market.
The Asia Pacific region is the largest electric bus market during the forecast period
Asia Pacific is will be the largest market for electric buses during the forecast period. The key reason for this is the increasing need to reduce urban pollution and dependency on fossil fuels in this region, along with growing government initiatives toward clean public transportation. Many of the leading players in the electric bus market, including BYD (China), Yutong (China), King Long (China), Zhongtong (China), Tata Motors (India), Ashok Leyland (India), JBM Auto Limited (India) and many others are from Asia Pacific. Furthermore, the rapid expansion of the electric bus fleet in several countries in this region is also a ey driving factor for the region to dominate the market. The reduction in the batteries and EVs cost, and the development of charging infrastructures, also provide a great opportunity for the growth of the market. Many countries in the Asia Pacific region, including China, South Korea, India, and Japanese markets, have favorable government policies and mandates that promote the reduction of emissions and usage of green technology in public transportation.
Key Market Players
The key players in the Electric bus market BYD (China), Yutong (China), Proterra (US), CAF (Solaris) (Spain), VDL Groep (Netherlands), and AB Volvo (Sweden).
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