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

The global hybrid and electric buses and trucks market is undergoing a significant transformation as countries and companies prioritize clean mobility solutions. Valued at USD 80.7 billion in 2025, the market is projected to reach USD 198.3 billion by 2032, registering a strong CAGR of 13.7% during 2025-2032. This rapid expansion is fueled by favorable government policies, electrification mandates, and the adoption of emission-free alternatives across commercial fleets. Increasing concerns over urban air quality and greenhouse gas reduction targets are pushing transit authorities and logistics providers toward hybrid and electric vehicles.

The leading segment in the market is expected to be electric buses, largely due to their growing adoption in public transit systems. Cities worldwide are committing to electric bus fleets as part of their climate action strategies, supported by subsidies and charging infrastructure investments. Geographically, Asia Pacific is anticipated to dominate the market during the forecast period, driven by strong policy initiatives in China and India, along with the rapid development of battery technologies and extensive public transportation networks. This region's manufacturing base also gives it an edge in cost-effective production and deployment.

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Key Highlights from the Report

➤ The global hybrid and electric buses and trucks market is valued at USD 80.7 billion in 2025.
➤ Market revenue is projected to reach USD 198.3 billion by 2032.
➤ The industry will grow at a CAGR of 13.7% from 2025 to 2032.
➤ Public transport electrification drives the dominance of electric buses.
➤ Asia Pacific emerges as the leading regional market due to large-scale adoption.
➤ Government incentives and battery cost reductions are accelerating fleet electrification.

Market Segmentation

The hybrid and electric buses and trucks market is segmented based on product type, including hybrid buses, battery electric buses, hybrid trucks, and battery electric trucks. Among these, battery electric buses are projected to hold the largest share due to their role in decarbonizing urban transport systems. Transit agencies are shifting to all-electric fleets to reduce operational emissions, improve efficiency, and comply with stringent regulations. Meanwhile, hybrid trucks continue to gain ground in the logistics sector where full electrification faces challenges due to payload and range requirements.

In terms of end-user application, the market is segmented into public transport, freight and logistics, and other commercial users. The public transport segment is the clear leader, supported by large government-backed fleet deployments across major cities. However, the freight and logistics segment is expected to see the fastest growth rate in the coming years, as companies adopt green fleets to meet sustainability commitments and improve fuel cost savings. The push toward carbon neutrality in supply chain operations is expected to further accelerate demand in this category.

Regional Insights

Asia Pacific is the dominant region in the hybrid and electric buses and trucks market. Countries such as China, India, and Japan are investing heavily in clean transportation to reduce urban pollution and dependency on fossil fuels. China, in particular, leads global electric bus deployment, supported by strong government subsidies, expansive charging infrastructure, and domestic battery manufacturing capabilities. India's push toward electric mobility under government schemes is also contributing to regional growth.

Europe is another key market, characterized by strict emissions regulations and ambitious climate policies. European cities are transitioning municipal bus fleets to electric options, supported by EU-level funding. The logistics sector is also embracing electrification to meet carbon reduction targets. In North America, demand is steadily growing with transit agencies and private logistics firms adopting hybrid and electric vehicles, though expansion here is slower compared to Asia and Europe due to higher upfront costs and infrastructure gaps.

Market Drivers

One of the primary drivers of market growth is the global focus on sustainable transportation and carbon reduction. Governments worldwide are implementing strict emission norms and clean mobility policies, making hybrid and electric buses and trucks essential alternatives to diesel-powered fleets. In addition, declining battery costs are making electric vehicles more affordable and viable for large-scale adoption. Many fleet operators are switching to electric options not only for environmental reasons but also to reduce long-term operating expenses, as EVs generally have lower maintenance and fueling costs.

Another significant driver is the growing investment in charging infrastructure. Public-private partnerships are working to establish extensive networks of charging stations that facilitate large-scale fleet electrification. Cities are prioritizing electric buses to improve air quality and meet clean mobility targets. Logistics companies are increasingly integrating hybrid and electric trucks to meet corporate sustainability goals and enhance brand reputation. Together, these factors create a strong foundation for robust industry growth through 2032.

Market Restraints

Despite strong growth potential, the market faces challenges such as high initial capital costs for electric buses and trucks. While operating expenses are lower, the upfront investment remains a barrier for small and medium-sized fleet operators, particularly in developing economies. Additionally, the limited charging infrastructure in several regions poses operational difficulties, especially for long-haul trucking where range and downtime concerns are significant.

Technological limitations in terms of battery energy density also restrain widespread adoption of electric trucks in heavy-duty applications. Logistics companies handling long-distance operations still face constraints due to limited driving range and lengthy charging times. Furthermore, global supply chain disruptions, particularly in battery raw materials like lithium and cobalt, could increase costs and slow production. These restraints must be addressed to unlock the market's full potential.

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Market Opportunities

The hybrid and electric buses and trucks market presents significant opportunities, especially with the rising corporate push for sustainability. Many multinational companies are committing to net-zero emissions, which is driving demand for green logistics solutions. This creates a lucrative opportunity for electric truck adoption in last-mile and mid-mile delivery services. Emerging markets, particularly in Asia, Africa, and Latin America, also present untapped potential as governments expand urban mobility programs.

Advances in battery technology and the emergence of solid-state batteries will further enhance vehicle range, reduce charging times, and improve affordability. Growing collaborations between governments, automakers, and energy providers to deploy large-scale charging infrastructure will accelerate fleet transitions. In addition, smart mobility solutions and digital fleet management systems are being integrated with electric buses and trucks, offering operational efficiencies and better energy utilization. These opportunities ensure sustained growth prospects through the forecast period.

Frequently Asked Questions (FAQs)

➤ How big is the global hybrid and electric buses and trucks market in 2025?
➤ Who are the key players in the global hybrid and electric buses and trucks market?
➤ What is the projected growth rate (CAGR) of the market between 2025 and 2032?
➤ What is the market forecast for hybrid and electric buses and trucks by 2032?
➤ Which region is estimated to dominate the industry through the forecast period?

Company Insights

Key players operating in the hybrid and electric buses and trucks market include:

• BYD Company Ltd.
• Volvo Group
• Daimler Truck AG
• Proterra Inc.
• Yutong Group
• Ashok Leyland
• Solaris Bus & Coach
• Scania AB
• Tata Motors

Recent Developments:

• BYD announced the expansion of its electric bus production capacity to meet rising demand across European and Asian markets.
• Daimler Truck AG launched a new line of long-range electric trucks tailored for logistics and freight operations in North America.

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