The global electric bus market has been in a steady growth phase in recent years, led by China who remains the leading region for electric buses. The electric bus market is one of the major segments of the global electric vehicle market, which contributes significantly in urban areas’ zero carbon emission policies and environment protection norms across the globe. With stronger government emphasis on reducing air pollution level caused by public transportation, more and more major cities around the world are adopting hybrid or all electric buses to serve in the public transport. There is already a world’s largest fleet of electric buses in China which is one of the numerous reasons why the nation is projected to continue its dominance in the global electric bus market through 2022.
Global Electric Bus Market Overview
According to the latest market report from Technavio, the?global electric bus market growth will register a CAGR of over 12% from 2018 to 2022. A key factor driving the growth of this market is the reduction in battery prices as batteries account for a significant share of the total cost of electric bus production. The need for efficiency improvement has encouraged battery manufacturers to come up with technological advancements in electric bus batteries. For example, advancements in Li-ion batteries have not only reduced the overall weight of electric buses but also increased their lifespan when compared to buses that use conventional lead acid and valve-regulated lead-acid batteries. Additionally, the global electric bus market is also supported by preferential initiatives and strong regulations from governments in the aim of reducing environmental pollutions in the urban areas.
Electric Buses in China: World’s Largest Electric Bus Market
China is currently the world’s largest electric bus market in terms of electric bus production, sales, and number of units in operation. According to the report from Bloomberg NEF’s “Electric Vehicle Outlook 2019”, out of almost 425,000 electric buses in operation worldwide at the end of 2018, approximately 421,000 were in China. China’s municipal electric bus fleet is projected to rise to more than 600,000 by 2025. Such market dominance is mainly attributed to China’s top-down approaches to facilitate the vehicle electrification, such as establish national mandates, subsidize electric bus manufacturers, and nurture policy competition among its cities.
China is expected to dominate the global electric bus market by 2025, owing to a majority of world’s leading electric bus manufacturers as well as major EV battery manufacturers being based in China. Some of the largest electric bus manufacturers in China include ANKAI, BYD Company, Higer Bus, Yinlong Energy, YUTONG, and Zhongtong Bus Holding etc. New product introductions and the growing market awareness towards electrically operated product forms are also driving the market growth.
The shift of manufacturing bases from Japan to China is also causing Li-ion battery prices to decline due to a declining domestic market. This shift encourages Chinese manufacturers to develop Li-ion batteries for EVs at a competitive price. Since electric buses are powered and driven by battery-powered systems, the battery cost is one of the most critical factors contributing to the upfront cost of an electric bus.
Moreover, well-established sales network and supportive government policies in China, including tax benefits and subsidies associated with production of electric vehicles, are expected to remain as some key driving factors for electric buses in China to be on the top of the global electric bus market over the coming years.
Technavio’s Global Electric Bus Market Report 2018-2022
This market research report analyses the market outlook and provides a list of key trends, drivers, and challenges that are anticipated to impact the global electric bus market and its stakeholders over the forecast years. The global electric bus market analysts at Technavio have also considered how the performance of other related markets in the vertical will impact electric bus market size till 2022.