The electric bus market is growing due to
strict government regulations on carbon emissions, declining battery prices,
and increasing government support for electric transportation modes. A study by
P&S Intelligence estimated that by 2025, the worldwide electric bus (e-bus)
sales will stand at 331,327 units, advancing at a 16.6% CAGR during the
forecast period 2018–2025. Electric buses are those that either solely run on
electric batteries or on a combination of a battery and internal combustion
engine.
Segmenting the domain
by vehicle type, we get battery electric bus (BEB), hybrid electric bus (HEB),
and plug-in hybrid electric bus (PHEB) as the three categories. The BEB
category led the electric bus market
during the historical period 2013–2017 with more than 75.0% sales volume share,
as these produce almost no harmful emission. This is why, this bus type is
expected to dominate the market in the future as well.
Similarly, the domain
can also be segmented by battery type, wherein lithium nickel manganese cobalt
oxide (NMC), lithium iron phosphate (LFP), and others would be the three
resulting subdivisions. Among these, the e-buses with LFP batteries registered
the highest sales during the historical period, as these batteries are cheaper
and safer compared to others. Further, less than 10 m and more than 10 m are
the two electric bus market categories
based on length. Of these, the less than 10 m bus category registered the
higher sales volume (60.0% share) in 2017, as these are preferred by government
transport departments.
Since public transit
authorities are the major buyers of e-buses, the sale of less 10 m variants has
been contributing to the electric bus
market growth. Rising concerns about greenhouse gas emissions have led
governments in several countries to phase out their gasoline or diesel buses.
Public authorities are actively giving grants and funding to encourage the
manufacture of e-buses. For example, the Federal Transit Administration under
the U.S. Department of Transportation offered a $55 million competitive funding
in 2017 for buying or leasing zero or low-emission buses.
Another reason for
strong government support for e-buses are increasing crude oil prices. A major
chunk of the expenditure of developing countries goes into purchasing crude
oil; therefore, to decrease their expenditure, governments are encouraging the
adoption of e-buses. Though little costly than conventional buses, e-buses are
cost-effective in the long run, as these help save the heavy expenses incurred
due to crude oil import. Therefore, their dual importance is expected to take
the market toward a bright future.
Declining electric
battery costs is as much of significance in the electric bus market growth as government support. There has been a
significant increase in battery production, particularly in China, which has
led to a considerable decline in battery prices. As almost 40.0% of the bus
cost is attributed to its battery, a further reduction in battery prices is
expected to affect the market positively. Further, battery manufacturers are
working tirelessly to increase the output power in order to give bus customers
more value for their money.
Therefore, we see due
to their environment-friendliness and cost-effectiveness, e-buses are set to
become the future of mass transit.
