The electric bus market is on the cusp of a significant transformation, with a surge in global demand expected to redefine public transportation systems worldwide.
According to the newly released report, the electric bus market was valued at $15.90bn in 2024. It is projected to grow at a compound annual growth rate (CAGR) of 15.14%, reaching an impressive $65.10bn by 2034.
This growth is fuelled by increasing environmental concerns, government regulations, and advances in technology.
The driving forces behind growth in the electric bus market
As urban areas continue to grapple with pollution and climate change, the need for sustainable and efficient transportation solutions has never been more urgent.
Electric buses, which are powered by electricity instead of traditional fossil fuels, have emerged as a key component of this transition.
These vehicles offer numerous benefits, including significant reductions in greenhouse gas emissions, lower operational costs, and quieter operations compared to their diesel-powered counterparts.
Governments worldwide are playing a crucial role in accelerating the adoption of electric buses through stringent environmental regulations and incentives.
For instance, the European Union’s Clean Vehicle Directive mandates that a certain percentage of new buses purchased by public authorities must be low-emission or zero-emission vehicles, including electric buses.
In the United States, the Federal Transit Administration’s (FTA) Low or No Emission Grant Program has been a driving force, providing substantial funding to transit agencies to purchase electric buses and the necessary supporting infrastructure.
In 2020 alone, the FTA allocated over $180m to support the adoption of low-emission buses across the country, highlighting the growing commitment to cleaner transportation.
Global investment in charging infrastructure
One of the key challenges in the widespread deployment of electric buses is the development of adequate charging infrastructure.
The success of the electric bus market is inextricably linked to the availability of reliable and accessible charging stations. Recognising this, governments and private sectors are making substantial investments in this area.
China, the world’s largest electric bus market, is leading the way with an ambitious plan to install over 600,000 charging stations by 2025, a move spearheaded by the Ministry of Transport.
This initiative is aimed at supporting the country’s rapidly expanding electric bus fleet, which is part of a broader strategy to reduce urban air pollution and greenhouse gas emissions.
In Europe, the European Investment Bank (EIB) is playing a pivotal role in financing the development of electric bus charging networks.
Cities like Paris and Amsterdam have received significant loans from the EIB to build extensive charging infrastructure, further propelling the adoption of electric buses in these metropolitan areas.
Technological innovations shaping the future of electric buses
The electric bus market is not just expanding in size but also evolving in terms of technology and innovation.
Manufacturers are constantly pushing the boundaries of design and performance, with a focus on battery longevity, energy efficiency, and passenger comfort.
These technological advancements are crucial for making electric buses a viable alternative to traditional diesel buses, particularly in terms of range and reliability.
A significant area of innovation is the integration of autonomous driving features and smart grid technology.
For example, in California, the California Air Resources Board (CARB) has set an ambitious target for all public transit agencies to transition to 100% zero-emission buses by 2040.
This initiative is not only encouraging the adoption of electric buses but also driving technological advancements in the sector, such as the development of autonomous electric buses that can operate seamlessly within a smart city infrastructure.
The road ahead: A sustainable future for public transportation
As cities around the world continue to prioritise sustainable urban mobility, the electric bus market is poised for significant growth and transformation.
The projected increase in market value of almost $50bn by 2034 underscores the potential of electric buses to revolutionise public transportation systems globally.
The combination of government support, technological innovation, and strategic investments in infrastructure is creating a conducive environment for the widespread adoption of electric buses.
As the market evolves, electric buses are expected to become a central component of urban transportation networks, offering a cleaner, quieter, and more efficient mode of travel for millions of commuters worldwide.
