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The global electric bus market size was valued at 170 thousand units in 2020 and is projected to grow from 192 thousand units in 2021 to 544 thousand units by 2028, exhibiting a CAGR of 16.0% during the forecast period. Based on our analysis, the global market exhibited a decline of 14.1% in 2020 as compared to the average year-on-year growth during 2017-2019. The global impact of COVID-19 has been unprecedented and staggering, with the market witnessing a negative impact on demand across all regions amid the pandemic. The rise in CAGR is attributable to this market's demand and growth, returning to pre-pandemic levels once the pandemic is over.
According to the United Nations Environment Program (UNEP), city buses are the cause of large amounts of black carbon emissions in the transportation sector. Therefore, the UNEP is providing technical and policy support to 20 cities in Asia, Latin America, and Africa to develop and map low-emission transportation routes for the public by including e-buses. In addition, the UNEP, together with the International Clean Transportation Council (ICCT) and regional partners, has provided technical support to identify and eliminate obstacles and supports the adoption and design of clean buses to achieve public commitment. These government initiatives are expected to drive the electric bus market growth during the forecast period.
Increase in Public-Private Partnerships or Concession Model Can Boost Post-Covid-19 Recovery
The covid-19 pandemic has severely affected e-bus rollouts. Several public transit systems around the globe are facing extreme revenue losses due to a decline in transit ridership during the pandemic. According to the American Public Transportation Association (APTA), a decline of 80% was observed in April 2020 in public transit usage, and ridership levels for the rest of 2020 also declined by more than 60% compared to 2019. According to APTA, this trend will continue in the near to mid-term due to factors such as increased remote work and a rise in private vehicle ownership.
These factors are responsible for causing a severe decline in revenue, with a USD 39 billion revenue decline projected by APTA through 2023. Similarly, according to the Transformative Urban Mobility Initiative, in Brazil, during April and May 2020, urban transport systems were losing around USD 190 million every day. Hence, this will impact the transition to e-buses, as the cost is one of the primary restraints for converting to electric models.
An increase in public-private partnerships, as witnessed in Latin America, can help to reduce the cost burden currently faced by transit agencies. For instance, there are 776 e-buses in Santiago, Chile, all of which are privately owned. Under this model, fleet owners buy and maintain these buses and provide them to municipalities or transport operators under long-term contracts. This unbundles operation and ownership. This can enable a large-scale transition to electrified fleets. Hence, these factors will influence the growth of the market.
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Environmental Benefits of e-Buses to Drive Market Growth
Vehicle emissions are exclusively liable for discharging 29% of ozone-depleting substances that bring about air pollution and are dangerous for the atmosphere. The consumption of unrefined petroleum and rising fuel costs have brought about an ascent in fame and demand for vehicles that are less harmful to nature and utilize electric energy. This has additionally prompted an expansion in the adoption of these buses to lessen the reliance on petroleum fuels. Furthermore, due to fewer moving parts, electric vehicles are light in weight and more productive than conventional modes of transport. As a result, there is a lesser requirement for vehicular maintenance, and overall these vehicles are beneficial for the environment. Owing to these drivers, therefore, the market is expected to grow substantially over the electric bus market forecast period.
Rising Demand for Hydrogen Fuel Cell Bus to Boost Market
Hydrogen fuel cell buses are powered by combining an electric powertrain with fuel cell systems, managed technology, and batteries. These buses are considered next-generation green transport as they have a more prolonged life than a standard e-bus. The hydrogen fuel cell bus has a speedy refueling pace and route flexibility. With such advantages, the demand for the hydrogen fuel cell bus is growing enormously. For instance, in Europe, approximately one thousand hydrogen buses will be introduced in the next few years. China has been a frontrunner in this technology and is propelling the battery-electric powered market.
Stringent Government Emission Regulations to Drive Market Growth
As indicated by the World Health Organization (WHO), a significant reason for deaths has been air contamination. Since vehicular discharge affects general wellbeing and the environment may lead to a hazardous effect on the environment. Governments around the world are robustly putting resources into infrastructural advancements to diminish ozone-depleting substances and lower air pollution levels. This is being achieved through the framing of stringent government norms over vehicle emissions. These guidelines are fueling the expansion of this market. These buses are environment-friendly as they don't discharge any harmful substances. Additionally, e-buses are proficient and give clean urban transportation, providing urban communities with an alternate track to the maintainability of clean air. In response, many urban areas are increasingly accepting E-transport systems in certain nations such as China and the U.S.
High Cost of Battery Buses May Restrain Market Growth
E-buses are eco-friendly and are also low in maintenance. However, the initial cost of these buses is higher compared to conventional buses. This is a major hindrance for several governments and administrations for the implementation of e-buses in the public transportation sector. Furthermore, governments are providing subsidies for the purchase of private electric vehicles, which may lead to a positive effect on this market for those who are willing to purchase commercial fleets. Moreover, even standard e-buses cost more than double their conventional counterparts, which may hamper the growth of the market.
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Battery Bus Segment to Dominate Market due to Presence of Huge Number of Battery e-Buses
Based on type, the market is segmented into fuel cell electric vehicles, plug-in hybrid electric vehicles, and battery-electric vehicles.
The battery-electric vehicles segment dominated the market with a share of 91.4% in 2020. Battery-electric powered buses store electricity onboard in the high-capacity battery sets. These buses are made to utilize the benefits of those batteries to run the electrical motor and onboard all electronics. The fuel cell electric vehicle segment is likewise estimated to grow exponentially during the forecast period as hydrogen fuel cell buses last longer and have speedy refueling capability as compared to the regular e-buses. The plug-in hybrid electric vehicle segment is predicted to witness constant growth in this market during the forecast period. These buses can charge the battery with the aid of both plugging inside the external electric strength supply and regenerative braking.
Less than 200 Miles Segment Held Largest Share in Market Due to Lower TCO
Based on range, the market is segmented into less than 200 miles and more than 200 miles.
The less than 200 miles segment accounted for the largest share of the market owing to lower total operating cost (TCO)/km and less recharging time. The more than 200 miles segment is anticipated to exhibit a higher CAGR during the forecast period. Factors such as decreasing battery costs and improvement in energy consumption and mileage of new e-buses will drive the growth of this segment.
Up to 400 kWh Segment to Dominate Market due to Being Lightweight and More Efficient
Based on battery capacity, the market is segmented into up to 400 kWh and above 400 kWh.
The up to 400 kWh segment held the largest share of the market in 2020. Buses with a battery capacity of up to 400 kWh are considerably cheaper, more lightweight, and more efficient as they can be swiftly fast-charged at timely intervals. These factors are responsible for the dominance of this segment. The above 400 kWh segment is expected to show steady growth in the market owing to the ability to cover longer distances on a single charge.
Asia Pacific Electric Bus Market Volume, 2020 (Thousand Units)
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Asia Pacific region dominated the global market and was valued at 167 thousand units in 2020. China is leading the regional market and also globally on account of having the biggest market in terms of quantity. The Chinese government has developed its public transportation zones for the use of these type of buses. The tasks taken by the government have boosted the adoption of battery-operated buses in the region. Moreover, the presence of the marketplace leader BYD is further fueling the growth of the market in this region. Additionally, the speedily growing charging infrastructure in this region is auguring well for the regional market. Japan and South Korea also are contributing to the booming sales of these type of buses in this region.
Europe is the second-biggest market and is expected to show healthy growth over the forecast period. The stringent government policies for car emissions are the main factor promoting the market rise in this region. Many governments have started taking projects to make city public transport sustainable by deploying clean and green transportation technologies in this region. The demand for fuel cell buses in this region is likewise growing.
North America is also anticipated to show defined growth in the global market. The U.S. is predicted to show steady growth in this region. The stringent emission guidelines in this country are likely to boost the market in the coming years.
BYD is Leading Player of Market Owing to Extensive Product Portfolio and R&D Capabilities
BYD is the leading player in the market owing to its high vertical integration ability, independent R&D, and advanced battery technology. The company is the world's largest rechargeable battery manufacturer and offers the longest battery warranty in the industry. Hence, these factors have enabled BYD to rapidly gain a larger share of the global market beyond China. For instance, in January 2021, BYD won the largest order outside China for 1,002 battery-electric buses from TRANSMILENIO S.A. in Bogota, Colombia.
An Infographic Representation of Electric Bus Market
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The global electric bus market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the market forecast and trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market over recent years.
Volume (thousand units)
By Propulsion Type
By Battery Capacity
Fortune Business Insights says that the global electric bus market volume was 170 thousand units in 2020 and is projected to reach 544 thousand units by 2028.
In 2020, the Asia-Pacific electric bus market volume stood at 167 thousand units.
The electric bus market is projected to grow at a CAGR of 16.0% and will exhibit excellent growth in the forecast period (2021-2028).
The battery-electric vehicle type segment is expected to be the leading segment in this electric bus market during the forecast period.
Stringent government norms for vehicle emission, increasing demand for battery-powered buses for publicly owned bus fleets and continued investment in R&D by e-bus manufacturers are propelling the electric bus market growth.
BYD is the leading player in the global electric bus market.
Asia Pacific dominated the electric bus market share in 2020.
The increasing adoption of hydrogen fuel cell buses is expected to drive the growth of this industry.
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