Hybrid and Electric Buses and Trucks Market to Reach USD 198.3 Billion by 2032, Growing at 13.7% CAGR | Persistence Market Research

Overview of the Market, Market Statistics, Key Growth Drivers, and Leading Segment

The global hybrid and electric buses and trucks market is experiencing rapid transformation as governments, fleet operators, and manufacturers pivot towards cleaner and more sustainable transportation solutions. Valued at USD 80.7 billion in 2025, the market is projected to surge to USD 198.3 billion by 2032, expanding at a healthy compound annual growth rate (CAGR) of 13.7% between 2025 and 2032. This robust growth reflects the increasing urgency to reduce greenhouse gas emissions, improve fuel efficiency, and comply with stringent environmental regulations worldwide.

Key growth drivers include the accelerating adoption of zero-emission commercial vehicles, rising fuel costs, advancements in battery technology, and government incentives for electric fleet deployment. The electric bus segment is anticipated to dominate due to strong public transit electrification initiatives, especially in urban centers. Asia-Pacific is expected to lead the market, supported by large-scale production in China, government subsidies, and aggressive policy frameworks promoting clean mobility.

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✅Key Highlights from the Report:

➤ The global hybrid and electric buses and trucks market will grow from USD 80.7 billion in 2025 to USD 198.3 billion by 2032.
➤ CAGR during the forecast period is projected at 13.7%.
➤ Asia-Pacific will lead the market due to large-scale EV manufacturing and strong policy support.
➤ Electric buses will remain the dominant segment in terms of sales volume.
➤ Battery technology advancements are reducing costs and extending driving ranges.
➤ Government incentives and subsidies are fueling rapid fleet electrification.

📊 Market Segmentation:

The market is segmented by vehicle type into electric buses, electric trucks, hybrid buses, and hybrid trucks. Electric buses lead the segment due to large-scale adoption in public transit systems, supported by urban air quality improvement programs. Electric trucks, both light and heavy-duty, are gaining momentum in logistics and freight operations as companies target lower operational costs and compliance with emission standards.

By propulsion type, the market includes battery electric vehicles (BEV), plug-in hybrid electric vehicles (PHEV), and hybrid electric vehicles (HEV). BEVs are expected to dominate due to zero tailpipe emissions and lower maintenance costs, while PHEVs and HEVs remain attractive for regions with limited charging infrastructure. Additionally, the integration of advanced telematics and smart charging solutions is enhancing operational efficiency for fleet operators.

📊 Regional Insights:

Asia-Pacific holds the largest share of the hybrid and electric buses and trucks market, led by China's extensive manufacturing capacity, strong domestic demand, and proactive government subsidies for clean mobility. India and Japan are also expanding their electric public transport and freight fleets.

Europe ranks as the second-largest market, driven by stringent emission regulations, well-developed charging infrastructure, and ambitious carbon-neutral targets. Cities across Germany, the UK, and the Netherlands are investing heavily in electric buses to replace diesel fleets.

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Market Drivers

One of the strongest drivers is global regulatory pressure to curb emissions from the commercial transport sector. Countries are enforcing low-emission zones and offering substantial subsidies for the adoption of hybrid and electric commercial vehicles. Rising fuel prices and growing corporate sustainability commitments are further incentivizing the switch to electric fleets.

Technological progress in battery chemistry, charging infrastructure, and energy management systems is reducing total cost of ownership (TCO) for electric buses and trucks. Additionally, urban population growth and demand for clean public transport are boosting adoption rates.

Market Restraints

High initial acquisition costs and limited charging infrastructure in certain regions remain primary challenges. Long charging times and concerns about driving range for heavy-duty applications also impact adoption, particularly in long-haul trucking.

Battery supply chain constraints, including sourcing of raw materials such as lithium and cobalt, can lead to cost volatility. Furthermore, in emerging markets, lack of grid capacity for large-scale charging poses operational challenges for fleet deployment.

Market Opportunities

Opportunities lie in rapid electrification of public transport and freight delivery fleets, especially in urban areas. Emerging markets in Southeast Asia, Africa, and Latin America are beginning to explore large-scale electrification, presenting untapped potential.

Fleet-as-a-Service (FaaS) models and battery leasing programs can lower upfront costs and accelerate adoption. The rise of autonomous driving technology, when integrated with electric platforms, could further revolutionize the sector by optimizing energy usage and fleet efficiency.

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👉Frequently Asked Questions (FAQs):

➤ How Big is the Hybrid and Electric Buses and Trucks Market?
➤ Who are the Key Players in the Global Hybrid and Electric Buses and Trucks Market?
➤ What is the Projected Growth Rate of the Hybrid and Electric Buses and Trucks Market?
➤ What is the Market Forecast for the Hybrid and Electric Buses and Trucks Market for 2032?
➤ Which Region is Estimated to Dominate the Hybrid and Electric Buses and Trucks Industry through the Forecast Period?

📌 Key Players

✦ BYD Company Ltd.
✦ Volvo Group
✦ Daimler Truck AG
✦ Yutong Bus Co., Ltd.
✦ Proterra Inc.
✦ Scania AB
✦ Zhongtong Bus Holding Co., Ltd.
✦ MAN Truck & Bus SE
✦ Alexander Dennis Limited (ADL)

Recent Developments
■ BYD unveiled a new long-range electric truck model targeting logistics operators in Europe.
■ Volvo Group announced a large-scale deployment of electric buses in partnership with a major Scandinavian city transport authority.

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