Electric Bus Market Trends: Transforming Global Urban Mobility by 2030

The Electric Bus Market Trends has witnessed substantial growth in recent years, driven by the global shift towards sustainable transportation and the reduction of carbon emissions. Governments across the world are implementing strict regulations and offering incentives to promote the adoption of electric buses in urban areas. With advancements in battery technology, charging infrastructure, and a push for cleaner public transport solutions, the electric bus market trends is expected to expand significantly over the next decade.

As cities aim to modernize public transportation systems, the electric bus market trends is projected to see continued growth. Fleet operators are transitioning to electric buses to meet environmental targets, reduce operational costs, and improve air quality. Additionally, the increasing demand for zero-emission public transport solutions is propelling investments in electric bus manufacturing and innovation, further boosting the electric bus market trends globally.

The global electric bus market is projected to be USD 17.0 billion in 2024 and to grow to USD 37.5 billion by 2030, at a compound annual growth rate (CAGR) of about 14.2%.

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LFP Battery type is expected to be the largest market by 2030.

Lithium Iron Phosphate (LFP) batteries are estimated to be dominating the electric bus market during the forecast period. This is mainly due to the larger demand for electric buses in the Chinese market (more than 60% of the global demand) which primarily LFP battery chemistry is predominantly favored in the domestic market. The LFP batteries are less expensive compared to other lithium-ion types like NMC or NCA. The main factor causing this disparity in cost is the availability of abundant raw materials such as iron and phosphate, which are essential for LFP batteries. Unlike cobalt and nickel, they are more resistant to changes in price. Furthermore, in China, there is a robust manufacturing industry for LFP batteries, with top companies like CATL, BYD, and SVOLT Energy Technology Co., Ltd leading the way. In addition, LG Energy Solution, Samsung SDI, Panasonic Corporation, and SK Innovation from South Korea and Japan are also major players in the area, possessing significant expertise in producing large battery packs and cells, resulting in cost savings through scale economies and technological advancements. Other Asian companies, many of them are either exporting their e-buses or selling the battery technology which leads to growing adoption of LFP battery chemistry in other regions as well. According to the IEA, the cost of LFP batteries has been significantly affected by the sharp rise in prices of battery minerals over the past few years, mainly due to the increased cost of lithium.Nonetheless, despite the rapid increase in lithium prices, LFP batteries remain more affordable than Nickel Manganese Cobalt (NMC) batteries. By 2023, the cost difference between NMC and LFP batteries has decreased, with NMC batteries now costing less than 25% more than LFP batteries, compared to a 50% price gap in 2021. The electric bus market share of LFP batteries is projected to increase significantly as OEMs and battery manufacturers expand production and enhance LFP battery technology.

The above 400 kWh battery capacity segment is projected to be the fastest-growing market for electric buses from 2024 to 2030

Above 400 kWh battery capacity electric buses are estimated to grow at the fastest CAGR during the forecast period. This range is usually offered in electric buses for intercity or long-distance commutes. Developments in battery technologies and the reduction in prices of batteries have positively impacted the growth of above 400 kWh batteries. Severe weather has a negative impact on battery performance, requiring larger capacities to maintain efficiency and range. Buses having larger battery capacities can travel more without recharging often, which is important in regions with tough weather and limited charging infrastructure. Long-range electric buses with large capacity batteries are particularly useful in locations with unreliable infrastructure for charging. It is expected that government financing and incentives for electric public transportation projects will favour buses that have larger battery capacities in order to maximise the efficiency and effectiveness of these vehicles. The market is anticipated to expand due to falling battery costs and continuous improvements in battery components.

North America will be the fastest-growing market for electric buses from 2024-2030.

North America is estimated to be the fastest-growing market during the forecast period. In North America, government incentives, the presence of individual investors, and technological edge are driving the electric bus market. The US has been leading the market in this region. The market is expanding due to government incentives, tax breaks, and private investments. The Federal Transit Administration set aside USD 1.7 billion in 2023 for buses, with an emphasis on zero-emission vehicles, even though European acceptance lags lag. This shift is further supported by the USD 5.6 billion set up in the Bipartisan Infrastructure Law for cleaner buses. make at least one-third of its 70,000 public transit buses electric by 2045. 

Key Market Players:

The report profiles key players such as BYD Company Ltd. (China), Yutong Co., Ltd. (China), VDL Groep (Netherlands), AB Volvo (Sweden) and CAF (Solaris Bus & Coach sp. z o.o.) (Spain). These companies adopted new product development, and supply contract strategies to gain traction in the terminal tractor market.

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