Electric Bus Market Size, Share & Trends Analysis Report By Vehicle Type (Battery Electric Vehicle, Plug-in Vehicle), By Battery Type, By Application (Intercity, Intracity), By End-use, By Region- Global Industry Analysis, Share, Growth, Regional Outlook and Forecasts, 2024-2033

The global electric bus market size was exhibited at USD 28.34 billion in 2023 and is projected to hit around USD 184.45 billion by 2033, growing at a CAGR of 20.6% during the forecast period of 2024 to 2033.

Key Takeaways:

• The Asia-Pacific region held the highest market share of more than 80% in the electric bus industry in 2023.
• The BEV segment dominated the electric bus industry with a share of more than 65% in 2023.
• The lithium-ion-phosphate battery segment dominated the market with a market share of more than 90% in 2023.
• The intercity segment dominates the overall market and will hold a market share of more than 90% in 2023.
• The public segment held the highest market share of more than 86% of the global electric bus industry in 2023.

Electric Bus Market: Overview 

The electric bus market has witnessed significant growth in recent years, driven by the increasing demand for sustainable transportation solutions, government initiatives to reduce carbon emissions, and advancements in battery technology. This overview aims to provide insights into the current state of the electric bus market, key trends shaping its trajectory, growth drivers propelling its expansion, and the promising prospects that lie ahead.

Electric Bus Market Growth

The growth of the electric bus market is propelled by several key factors. Firstly, heightened environmental concerns and stringent regulations aimed at reducing carbon emissions are compelling transit agencies and fleet operators to adopt electric buses as a sustainable alternative. Additionally, the substantial operational cost savings offered by electric buses, including lower fuel expenses and reduced maintenance requirements, are driving their adoption as a financially attractive option. Furthermore, increasing public awareness of environmental issues and a preference for cleaner transportation modes are fueling demand for electric buses among passengers, further incentivizing transit agencies to integrate them into their fleets. Moreover, technological advancements in battery technology, coupled with supportive government policies and investments, are facilitating the growth of the electric bus market, paving the way for a greener and more sustainable urban transportation landscape.

Electric Bus Market Report Scope

Electric Bus Market Dynamics

• Environmental Regulations and Sustainability Initiatives:

Government regulations aimed at reducing carbon emissions and combating air pollution are driving the adoption of electric buses. Environmental concerns have led many cities and regions to implement strict emission standards, incentivizing transit agencies and fleet operators to transition to electric buses to comply with regulatory requirements. Additionally, sustainability initiatives by governments and organizations worldwide are pushing for the electrification of public transportation as part of broader efforts to mitigate climate change and improve air quality. As a result, the electric bus market is experiencing significant growth as demand for clean and sustainable transportation solutions continues to rise.

• Technological Advancements and Cost Competitiveness:

Technological advancements in battery technology, charging infrastructure, and electric drivetrains are driving the growth of the electric bus market. Improved energy density, longer battery life, and faster charging capabilities are enhancing the performance and range of electric buses, making them more viable for urban transit operations. Moreover, economies of scale and increased competition in the electric vehicle market are driving down costs, making electric buses more cost-competitive with traditional diesel buses over their lifecycle. As a result, transit agencies and fleet operators are increasingly considering electric buses as a financially attractive option, further fueling market growth and innovation.

Electric Bus Market Restraint

• High Initial Capital Costs:

One of the primary restraints hindering the widespread adoption of electric buses is the high initial capital costs associated with purchasing electric bus fleets and establishing charging infrastructure. While electric buses offer long-term operational cost savings compared to traditional diesel buses, the upfront investment required for procurement and infrastructure development can pose a significant barrier for transit agencies and fleet operators, especially those with limited financial resources. 

• Limited Charging Infrastructure and Range Anxiety:

Another key restraint facing the electric bus market is the limited availability of charging infrastructure and concerns related to range anxiety. Unlike traditional fossil fuel-powered buses, electric buses require access to charging stations to recharge their batteries, which can pose logistical challenges, especially in areas with inadequate charging infrastructure. Additionally, concerns about the range and battery life of electric buses may deter transit agencies from fully embracing electrification, particularly for routes with longer distances or variable schedules. 

Electric Bus Market Opportunity

• Growth Potential in Emerging Markets:

Emerging markets present significant growth opportunities for the electric bus market. Rapid urbanization, increasing population density, and escalating environmental concerns in emerging economies are driving demand for sustainable transportation solutions. Governments in these regions are increasingly investing in public transit infrastructure and incentivizing the adoption of electric buses through subsidies, tax incentives, and regulatory mandates. As a result, there is a growing market potential for electric buses in countries across Asia, Latin America, and Africa, where urbanization rates are high, and air pollution levels are a growing concern. 

• Integration with Smart City Initiatives:

The integration of electric buses with smart city initiatives presents another significant opportunity for market growth. Smart city projects focus on leveraging technology and data-driven solutions to improve urban mobility, enhance energy efficiency, and reduce environmental impact. Electric buses play a crucial role in these initiatives by offering a cleaner, quieter, and more sustainable mode of public transportation. By integrating electric buses with smart city infrastructure, such as intelligent transportation systems, real-time monitoring, and predictive maintenance solutions, cities can optimize bus operations, improve passenger experience, and reduce overall transportation-related emissions. 

Electric Bus Market Challenges

• Infrastructure Limitations and Grid Capacity:

A significant challenge for the widespread adoption of electric buses is the inadequate charging infrastructure and grid capacity to support large-scale electrification of bus fleets. Establishing charging stations, especially fast-charging infrastructure, requires substantial investment and coordination among various stakeholders, including transit agencies, utilities, and government entities. Additionally, upgrading the electrical grid to accommodate the increased demand from electric buses can pose logistical and financial challenges. 

• Technological Limitations and Battery Performance:

Technological limitations and battery performance issues remain significant challenges in the electric bus market. While advancements in battery technology have improved the energy density, lifespan, and charging capabilities of batteries, challenges such as limited range, degradation over time, and high costs persist. Electric buses operating in demanding urban environments with frequent stop-and-go traffic and varying weather conditions may experience accelerated battery degradation, reducing overall vehicle performance and reliability. Moreover, concerns about battery safety, thermal management, and recycling also pose challenges for electric bus manufacturers and operators.

Segments Insights:

• Vehicle Type Insights

Based on vehicle type, the market is segmented into battery electric vehicles (BEV), plug-in vehicles (PHEV), and fuel cell vehicles (FCEV). The BEV segment dominated the electric bus industry with a share of more than 65% in 2023. The battery-powered bus is a more efficient alternative to zero-emission or low-emission cars. The BEVs are more effective when compared to conventional buses. The battery-powered bus allows for faster driving ascompared to buses powered by fuel or gasoline. Compared to diesel or gasoline-powered buses, BEVs are easier and less expensive to charge.

The FCEV segment is expected to witness high paced CAGR of 27.8% in the global electric bus market from 2023 to 2033. The FCEV contributes to a decrease in air pollution and greenhouse gas emissions. The segment is growing because of increased government initiatives to reduce carbon emissions and protect the environment. For instance, Germany is accelerating the adoption of fuel-cell transit buses. The German government has invested USD 642 million for the manufacturing and installation of 150 hydrogen and 1400 electric transit buses in the country. Furthermore, the growing technological advancement and adoption of advanced technologies are creating a lucrative opportunity for the growth of the segment in the electric bus industry.

Battery Type Insights

Based on battery type, the electric bus market is segmented into lithium nickel manganese cobalt oxide and lithium iron phosphate. The lithium iron phosphate battery segment dominated the market share of more than 90% in 2023. As compared to lead-acid batteries and other lithium batteries, lithium iron manganese battery offers a variety of benefits like enhanced discharge, charge efficiency, longer life term, no maintenance, optimum safety, and is lightweight. Although LiFePO4 batteries are not the most affordable in the electric bus industry, these batteries are a promising long-term investment in the changing electric bus industry owing to their extended lifespan and lack of maintenance.

The lithium nickel manganese cobalt oxide segment is anticipated to grow at a CAGR of 23.1% in the global electric bus market over the forecast period. The mineral is utilized as a cathode material in rechargeable lithium-ion batteries in batch quantities in powder form. This substance has incredibly high thermal stability. The advantageous properties of the Nickel Magnesium cobalt such as high cycle rate, capacity, and power as well as a low self-heating rate have increased its preference in the battery used for the e-buses.

Application Insights

Based on application, the market is segmented into intercity and intracity. The intercity segment dominates the overall market and held a market share of more than 90% in 2023.The growth can be contributed to the rising demand for public transport and an increasing number of people commuting to workplaces, schools, and universities throughout the world creating demand for intercity e-buses in the electric bus industry.

The intracity segment is anticipated to grow at a CAGR of 26.5% in the global electric bus industry during the forecast period. The growth of the segment is attributed to the increasing awareness among developing economies to reduce carbon emission levels and strict emission legislation pushing the adoption of e-buses. For instance, in March 2023, the UK-based bus depot, First Bus announced the launch of its three fully electric bus depots outside the capital. Furthermore, this initiative is expected to boost the launch of 5 new depots in the region by March 2024 through ZEBRA funding.

End-Use Insights

Based on end-use, the electric bus industry is segmented into public and private. The public segment held the highest market share of more than 86% of the global electric bus industry in 2023. The high share of the segment is attributed to the increasing transportation demand, and governments introducing several GHG emissions to curb air and noise pollution and reduce dependency on fossil fuels. For instance, in March 2023, a Belgium-based manufacturer of buses, coaches, trailers, and trolley buses signed a contract with Netherlands-based company Qbuzz for supplying 54 battery electric buses. These 15-meter e-buses are expected to be used by Qbuzz as regional public transport in Groningen and Drenthe.

The private segment is anticipated to grow at a CAGR of 20.4% during the forecast period. Several countries are taking the initiative for deploy e-buses within the countries which is further propelling the growth of the electric bus industry.

For instance, in January 2023, GreenCell Mobility Ltd, an Indian electric mobility player signed a contract with the transport department of the government of NCT Delhi for launching 570 electric buses in the span of the upcoming two years. Furthermore, the rising population coupled with the increasing greenhouse effect and shifting consumer preference towards public transport is further propelling the growth of the market.

Regional Insights

The Asia-Pacific region held the highest market share of more than 80% in the electric bus industry in 2023. The growth can be attributed to the growing demand for eco-friendly transport and the presence of countries such as China, India, and Japan. China is a major player in the electric bus industry and home to leading manufacturing companies. For instance, In March 2023, in China, more than 421,000 e-buses were in operation, which amounted to about 99% of the total fleet globally. Furthermore, strict government mandates, environmental concerns, and growing charging infrastructure are further propelling the overall electric bus industry in this region.

Europe is anticipated to grow at a CAGR of 35.3% over the forecast period owing to the favorable policies of the government and the growing efforts in controlling vehicle emissions. Furthermore, governments in this region have started projects to make public transportation more sustainable by deploying green transportation technologies.

Some of the prominent players in the electric bus market include:

• BYD Company Limited
• AB Volvo
• Proterra        
• Man Se
• Nissan Motor Corporation
• Ashok Leyland Limited
• Daimler Truck AG
• Zhengzhou Yutong Bus Co., Ltd.
• TATA Motors Limited
• Hyundai Motor Company

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2021 to 2033. For this study, Nova one advisor, Inc. has segmented the global electric bus market.

Vehicle

• Battery Electric Vehicle
• Plug-in Hybrid Electric Vehicle
• Fuel Cell Electric Vehicle

Battery

• Lithium Nickel Manganese Cobalt Oxide
• Lithium Iron Phosphate

Application

• Intercity
• Intracity

End-use

• Public
• Private

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa (MEA)