Global e-Bus Market Soars As Nations Embrace Emission-Free Transportation

A recent report on the global electric market claimed that the Greenhouse Gas (GHG) emission reduction targets pushed the international bus makers to opt for electric alternatives. The report was published by Reportlinker, a technology research and development company having expertise in artificial intelligence and machine learning. 

The report highlights the significant reduction in GHC emissions by employing hydrogen energy for transportation and industrial purposes. GHG emission reduction targets have driven bus makers to opt for electric alternatives, as seen with the establishment of targets in Colorado and Germany. The year 2019 saw the establishment of the Colorado emissions reduction target in the US. By setting the baseline at its 2005 levels, it has set reduction goals of 26 per cent by 2025, 50 per cent by 2030, and 90 per cent by 2050. Similarly, by 2030, Germany wants to reduce carbon emissions by at least 65 per cent compared to 1990 levels.

The Netherlands is a leading nation in adopting electric buses, aiming for all public bus transportation to be emission-free by 2030. As a result, the electric bus (e-bus) market is expected to witness substantial growth.

Product launches are a key developmental strategy for market participants to meet changing end-user demands. For instance, Yutong Bus Co., Ltd. launched the YEA technology platform for energy commercial vehicles. At the same time, Daimler Truck AG unveiled the Rizon brand of medium-duty trucks with lithium iron phosphate batteries. The Rizon branded trucks feature lithium iron phosphate batteries and a single charge mileage of up to 110 miles.

Volkswagen AG and Mercedes-Benz Group AG (Daimler Truck Holding AG) are identified as the forerunners in the market. In June 2023, Volkswagen AG released ID. Buzz electric bus. The ID. Buzz features an electric motor capable of producing power of up to 282 horsepower (HP) and a maximum speed of up to 99 mph. Companies such as Hyundai Motor Company, Volvo Group, and Nissan Motor Co., Ltd are some of the key innovators in the market. The report has been titled ‘Global Electric Bus Market Size, Share & Industry Trends Analysis Report By Battery Type, By Vehicle, By Application, By End-use, By Regional Outlook and Forecast, 2023 – 2030’.

Market Growth Factors

There are various factors that are tilting the shift toward electric buses.

Escalating prices for diesel and petrol

An electric car offers substantially reduced operating costs compared to a gasoline or diesel vehicle. Superior efficiency and lower energy cost mean electric automobiles are more affordable than gasoline or diesel vehicles. The cost gets further reduced when the charging is done using renewable energy sources like solar panels placed in bus depots. This is also urging nations to move from conventional to electric vehicles worldwide, causing the market to grow.

Use of advanced technologies, rapid industrialization, and electrification

Rapid urbanization, population growth, and industrial expansion are leading to increased demand for good transport vehicles worldwide, creating numerous job opportunities and driving the need for efficient public transportation modes. The adoption of advanced technologies, rapid industrialization, and electrification is causing nations to transition from conventional to electric vehicles, contributing to the growth of the electric vehicle market.

Market Affecting Factors

Some challenges remain that decide the level of EV penetration, especially for electric buses.

High development costs and safety issues with EV batteries

High development costs and safety concerns with EV batteries require substantial investments in advanced battery management systems. Electric buses face challenges due to the size of battery packs, impacting driving range, battery price, and vehicle design complexity. Battery replacement costs, influenced by mileage, operating temperature, and charging patterns, pose a barrier to the market expansion of electric buses.

Vehicle Outlook

Based on the vehicle, the market is characterized as battery electric vehicles, plug-in hybrid electric vehicles, and fuel cell electric vehicles. The fuel cell electric vehicle (FCEV) segment procured a considerable growth rate in the market in 2022. The segment is expanding due to more aggressive government attempts to cut carbon emissions and save the environment. For instance, the use of fuel-cell transit buses is accelerating in Germany. The German government has made significant contributions to the production and installation of electric public vehicles in the nation.

Battery Type Outlook

Based on battery type, the market is classified into lithium nickel manganese cobalt oxide and lithium iron phosphate. The lithium nickel manganese cobalt oxide segment recorded a significant revenue share in the market in 2022. The nickel magnesium cobalt battery has become more popular for use in electric buses because of its beneficial characteristics, which include a high capacity, cycle rate, and power, in addition to a low self-heating rate. Easy and cheap availability will alter the rate of Electric Buses adoption.

Application Outlook

By application, the market is divided into intercity and intracity. The intracity segment garnered a remarkable growth rate in the market in 2022. The segment is expanding as developing economies become more aware of the need to decrease carbon emissions and as severe emission regulations encourage the usage of electric buses. Clean mobility solutions are now essential due to rising urbanization. Urban population growth would necessitate widespread urban transit, offering tremendous electric mobility possibilities.

End-Use Outlook

Based on end-use, the market is segmented into public and private. The public segment procured the highest revenue share in the market in 2022. A significant proportion of the market is linked to the rising demand for transportation services as well as government initiatives to minimize greenhouse gas emissions and reliance on fossil fuels. Public initiatives often focus on developing the necessary charging infrastructure to support electric buses. It includes the installation of charging stations at bus depots, terminals, and along bus routes.

Regional Outlook

Region-wise, the market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The Asia Pacific segment recorded the largest revenue share in the market in 2022. The rise in demand for environmentally friendly transportation and the presence of nations like India, China, and Japan are responsible for the expansion. China is a significant player in the market and the location of top manufacturers. For instance, there were over 466,000 New Energy buses (NEBs) in China by the end of 2020, of which 378,700 were battery electric buses. Strict government regulations, environmental concerns, and expanding charging infrastructure are also boosting the region’s demand.

Recent Actions in Electric Bus Market

In Jun-2023, Volkswagen AG released ID. Buzz electric bus. The ID. Buzz features an electric motor capable of producing power of up to 282 horsepower and a maximum speed of up to 99 mph. In the same month, Yutong Bus Co., Ltd. announced the launch of YEA, a technology platform for energy commercial vehicles. The YEA features two core components, namely, the C-architecture used as a CPU of the commercial vehicle and the YOS, a commercial vehicle operating system featuring a self-developed OS by Yutong Bus. Earlier, Daimler Truck AG also unveiled the Rizon brand of medium-duty trucks. The Rizon branded trucks feature lithium iron phosphate batteries and a single charge mileage of up to 110 miles. Switch Mobility Ltd, a subsidiary of Ashok Leyland Limited, introduced Switch EiV 12 electric buses in June 2022.

The electric bus market also saw partnerships and agreements. Recently, Volvo Group came into partnership with Manufacturing Commercial Vehicles (MCV), an Egyptian bus manufacturer, to manufacture bodies for Volvo’s electric buses. In December 2022, Tata Motors came into an agreement with Delhi Transport Corporation, a public transport operator based in Delhi, India, to supply 1500 electric buses in Delhi.