Electric Bus Market Size, Share, Trends & Analysis by 2030

The global electric bus market is estimated to grow from USD 17.0 billion in 2024 to USD 37.5 billion by 2030 with a CAGR of 14.2% over the forecast period.

The growth of the electric bus market is driven by countries prioritizing the electrification of their public transportation fleets through subsidies and favorable regulations, prompted by emission concerns. Governments of the UK, Hungary, Japan, China, India, the US, and other countries, are planning to replace their existing gas engine-based transport buses and coaches, including intercity and intracity transport solutions, with battery-powered ones. The European Commission and private companies are pushing for initiatives to transition corporate fleets to ZEVs by 2030. Asia Pacific is expected to be the largest market during the forecast period. Governments of several Asia Pacific countries are offering incentives for the promotion of electric buses.

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Electric buses will find traction across major regions, driven by emission regulations, battery price drops, the emergence of low-emission zones, purchase subsidies, and tax exemptions. Also, significant investments and funding initiatives are supporting the deployment of EV charging infrastructure globally. For instance, the European Union, comprising 27 nations, intends to allocate approximately USD 10.08 billion for initiatives throughout Latin America and the Caribbean which drives the electric bus market in this region.

The battery electric bus segment is estimated to be the largest segment during the forecast period.

The BEVs segment dominates the electric bus market with around 95% share in 2024. Even though BEVs are more expensive to acquire initially compared to diesel buses, they have more operational efficiency, with the average being about 90% as compared to diesel ones, which is between 30% and 40%. The average range of battery electric buses usually delivers an average range of 150 to 250 miles, based on the installed battery type, and cost less with power consumption compared to diesel-powered vehicles. This results in reduced operational expenses for pure electric buses. The Asia-Pacific will remain the largest market for BEVs, with government policies supportive to pure electric buses. Aggressive efforts of China and financial support of India are the main forces behind this industry at present. By 2023, over 70% of all electric buses running on roads across the world will be from India. Besides, a significant dependence of battery electric buses lies in the improvement of battery technology. LFP, NMC, LTO, LMO, and other lithium-ion types of batteries had higher energy density and were cost-efficient. That way, electric buses can now go further between charges compared to earlier models of electric vehicles, thus reducing operational costs. Suppliers such as CATL, LG Energy Solution, and Panasonic have increased their production in order to satisfy the increasing need for high-performance batteries designed for electric buses. Therefore, increased regulatory compliance efforts, advancements in technology by manufacturers and suppliers, rising environmental consciousness, and a focus on sustainable mobility have all contributed to substantial growth in the battery electric bus sector.

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The electric school bus segment by application is projected to be the second fastest-growing segment during the forecast period.

Electric school buses are becoming increasingly popular with the 2nd fastest growing market driven by incentives and policies promoting zero-emission vehicles in school districts and communities concerned with air quality and environmental impact. North America is estimated to be the fastest and largest market for electric school buses.As many states in US provide grants and incentives to encourage the use of electric school buses, the US is leading the world in their implementation. For instance, the Los Angeles Unified School District (LAUSD) recently made the largest order for electric school buses ever placed by Blue Bird Corporation, ordering 180 units. In January 2024, Lion Electric Company started delivering the LionD, a new all-electric school bus that can accommodate 83 students, in California.Lion Electric was awarded USD 38 million for 97 buses and the associated charging infrastructure under the EPA's Clean School Bus Program. Through the EPA's Clean School Bus Rebate Program, over 2,300 electric buses have been funded in all 50 states and territories, totaling more than UAS 900 million. Such incentives within the area are what are promoting growth in the market for electric school buses, for example, the Clean School Bus Rebate Program of the EPA and incentives in California.

Asia Pacific is estimated to be the largest market for electric buses.

The Asia Pacific region is projected to account for the largest share of the electric bus market during the forecast period. According to IEA, China has become a global leader in the electric bus market, producing almost 60% of all electric buses globally in year 2023. Although this share has decreased from nearly 90% in 2020, China will continue to dominate the market. The decline is due to a drop in demand for both electric and ICE buses and increased sales in other parts of Asia Pacific, Europe, and North America. China is still at the top of the market because of its wide network of original equipment manufacturers (OEMs) that specialise in electric vehicles (EVs) and its established battery and other EV component supply chain. Companies such as BYD, Yutong, and Zhongtong have played a pivotal role in propelling innovation and augmenting production levels within the electric bus industry. These OEMs benefit from China's strategic push for electric mobility, which includes incentives, subsidies, and strict emission regulations that are speeding up adoption in urban areas. The introduction of the 'PM-eBus Sewa' initiative in India, aiming to implement 10,000 electric buses in urban areas through a public-private partnership (PPP) approach, has enhanced the nation's green transportation efforts. India aims to increase the number of electric buses to forty percent by 2030, with the help of programs like FAME I and II, which have approved 5,595 e-buses for public transportation. South Korea, Japan, and Singapore are also making plans to enhance their public and private bus fleets by incorporating electric vehicles. Companies such as Ashok Leyland, Mitsubishi Fuso Truck and Bus Corporation, JBM Group, Tata Motors, and Mitsubishi Fuso Truck and Bus Corporation are introducing electric bus models in an effort to cut emissions and rely less on fossil fuels. The market's expansion is further driven by huge expenditures in research and development and also in charging infrastructure. The Asia Pacific region remains at the forefront of sustainable urban transportation solutions because of its large production and sales volumes, along with ongoing technological innovations aimed at enhancing performance and cost-effectiveness.

Key Market Players:

The report profiles key players such as BYD Company Ltd. (China), Yutong Co., Ltd. (China), VDL Groep (Netherlands), AB Volvo (Sweden) and CAF (Solaris Bus & Coach sp. z o.o.) (Spain). These companies adopted new product development, and supply contract strategies to gain traction in the terminal tractor market.

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