Electric Mid- and Large (9-14m) Bus Market

[121 Pages Report] The electric mid- and large (9-14m) bus market is expected to grow from 66,593 units in 2023 to 171,000 units by 2030, with a CAGR of 14.4% from 2023 to 2030. The market is driven by factors such as demand for zero-emission vehicles, growing environmental concerns, and government initiatives promoting sustainable transportation drive the electric mid- & large bus market.

Factors such as rising air pollution and greenhouse gas emissions from traditional diesel buses have prompted a shift towards cleaner transportation options. Also, governments worldwide are implementing policies and incentives to promote the adoption of electric mid- & large buses. These measures include subsidies, tax breaks, preferential access to public transportation lanes, and investments in charging infrastructure. The increasing concentration of people in cities is creating a growing need for sustainable and efficient public transportation solutions. electric mid- & large bus are well-suited for urban environments due to their zero emissions and ability to operate in congested areas. The development of new charging technologies, such as fast charging and ultra-fast charging, is also increasing the range of electric mid- & large buses. The combination of these factors is creating a strong impetus for the adoption of electric mid- & large bus, making them a key component of the transition towards sustainable urban transportation. As technology continues to improve and government support remains strong, electric mid- & large buses are poised to play an increasingly dominant role in the future of public transportation.

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Market Dynamics:

DRIVER: Growing need for green mobility solutions

The widespread adoption of electric mid- & large buses is poised to gain momentum globally, propelled by factors such as stringent emission regulations, declining battery prices, the establishment of low-emission zones, government purchase subsidies, and tax exemptions. This surge in the embrace of electric transit buses has facilitated the development of a global supply chain for alternative powertrain buses. The escalating imperative to curb emissions, particularly in densely populated urban centers, will drive the demand for electric mid- & large buses in intra-city passenger transportation. According to the International Energy Agency (IEA), a substantial increase in the global production of batteries for electric mid- & large buses, featuring a 100 kWh capacity for Battery Electric Vehicles (BEVs), from 25,000 to 100,000 units annually, has the potential to significantly slash battery pack production costs per kilowatt-hour by 13%, nearly one-third lower than the existing price of USD 300/kWh. It is noteworthy that the cost of batteries is directly linked to their capacity, and while initial prices for high-capacity batteries were elevated, ongoing reductions have made them more economically viable for end users. Ongoing research is also focused on expanding battery pack sizes to support the diverse range requirements of electric mid- & large buses while concurrently reducing overall costs. With declining lithium prices, the adoption of electric mid- & large buses is expected to rise in future.

Restraint: EV Batteries related safety issues

While EV batteries used in electric mid- & large buses undergo rigorous testing to ensure safety, the US National Fire Protection Association (NFPA) reports that a notable portion of EV fires in the US between 2013 and 2017 were attributed to battery power systems. Factors such as temperature fluctuations, heavy rain, and overcharging were identified as primary contributors to EV battery fires. To address safety issues, manufacturing companies globally, including those in the US, China, Japan, and the European Union (EU), are mandated to prioritize continuous monitoring of battery safety, health, and performance. Specific electric mid- & large bus standards focus on limiting chemical spillage, securing batteries during crashes, and isolating the chassis to prevent electric shock. Additionally, ensuring optimal working temperature and protection necessitates advanced battery management systems, but their development demands a substantial investment of time and resources from manufacturers. The increased development costs subsequently impact the overall initial cost of electric vehicles, posing a financial burden on buyers. In the electric mid- & large bus context, the size of the battery pack, influenced by driving range requirements, directly affects the cost and complicates the vehicle's body and chassis design. Given that these batteries may require replacement once or twice during the bus's operational life, contingent on factors like annual distance traveled, operating temperature, and charging rates, the associated high initial and maintenance costs emerge as significant constraints for market growth

Opportunity: Innovation in Payment Models

Electric mid- & large bus will see a significant shift in the purchasing behaviors of operators and cities. This will see shifts away from CAPEX to OPEX based purchasing, including the utilization of new business models such as “bus-as-a-service”, “battery-as-a-service” and “depot-as-a-service” due to the increased CAPEX cost of eBus’s and the requirements for long term support of batteries and infrastructure. For public transport operators, NXP’s Mifare introduced smartcards and NFC ticketing solutions. In most cities, the original transit cards are no longer necessary.

Challenge: Developing charging infrastructure requires huge capital investment

Electric mid- & large buses face a trade-off between longer charging durations and a lower driving range per charge, with battery performance and lifespan crucially influencing both their effectiveness and costs. Lithium-ion batteries are progressively displacing lead-acid, nickel-cadmium, and nickel-metal hydride batteries in Electric mid- & large buses due to their extended lifespan. However, lithium-ion batteries exhibit limitations in capacity for powering heavy commercial vehicles like electric mid- & large buses, particularly in cold climates where charging-discharging efficiency decreases, impacting power delivery. According to Molecular Diversity Preservation International (MDPI), current electric mid- & large buses grapple with insufficient battery capacity, affecting their cooling capabilities. Presently available charging infrastructure also contributes to longer charging times, with the average duration to charge an electric mid- & large bus from 0% to 100% at a 7-kW charging point exceeding 4 hours. Additionally, industry experts highlight the need for an expanded network of charging stations, particularly in urban areas of Europe, North America, and other developed regions. Disparities in charging infrastructure are noted, with fewer charging stations in Eastern Europe compared to Northern Europe.

Market Ecosystem

City/transit bus to dominate the electric mid- and large (9-14m) bus market, by application

Electric mid- & large buses for city/transit applications are mostly preferred across Asia Pacific, Europe, and North America. The growth is mainly attributed for these buses as it is well-suited for use in urban areas and can carry many passengers as this segment's relatively larger seating capacity and easy to manoeuvre through narrow city streets and navigating around city traffic.  Moreover, the offered battery range in these buses are adequate for most urban transit routes and can undergo relatively quick charging, rendering them practical for daily operations by public transport bodies. However, electric mid- & large buses are also manufactured in alternative sizes, such as mini-buses and double-deckers, catering to specific purposes like airport shuttles or tourist routes. The growth in adopting electric transit buses has enabled global sourcing and supply chain for alternate powertrain buses. The increasing need for reducing emissions, especially in highly populated cities, will amplify the demand of electric mid- & large buses for city/transit application.

LFP is expected to be the fastest-growing battery type for electric mid- and large (9-14m) bus.

Lithium iron phosphate (LFP) batteries are expected to hold the largest share during the forecast period. LFP batteries offer several advantages as it is lightweight, low-priced, and higher thermal stability with enhanced discharge and charge efficiency than  NMC batteries. It has a longer life span, have minimal maintenance, and offer optimized safety. Due to these advantages, LFP batteries are extensively used in high-performance electric mid- & large buses, delivering a high current rate, ensuring high voltage bearing capability and possessing a long cycle life. Moreover, LFP batteries are also preferred choice for long-haul buses, as they can support heavy battery packs constructed with low-density cells, meeting the necessary range requirements.

As the prices of LFP batteries are lower than NMC and NCA batteries, Asia Pacific lead the adoption of LFP batteries in electric buese. For instance in September 2022, BYD Company Ltd. has developed blade battery technology which uses LFP chemistry, promise to offer 40-50% more energy density capacity. Some electric mid- & large buses which are deployed with this chemistryare Yutong E12, BYD K9, Zhongtong Bus LCK6125EVG, King Long XMQ6127EVG, Ashok Leyland Circuit, and Olectra BYD eBuzz K9 among others. With advancements in battery technology and a continuous drop in battery prices, the further boost in the demand of LFP battreies are expected to rise in electric mid- & large buses.

The Asia Pacific region is the largest electric mid- and large (9-14m) bus market during the forecast period

Asia Pacific is the largest market for electric mid- & large buses globally throughout the review period. The key reason of the higher regional demand is the increasing need to reduce urban pollution and dependency on fossil fuels in this region, along with growing government initiatives toward clean public transportation. China is the largest market globally, accounting for over 95% of the market share in 2022. Chinese companies such as BYD, Yutong, Ankai, and Zhongtong dominate the Chinese as well as global electric mid- & large buses markets. Chinese players have developed and offered electric mid- & large buses at lower prices due to the availability of parts and components at lower rates. Most Chinese bus manufacturers have fully electric and hybrid buses in their portfolio and focused on providing and redefining mass transportation and have won several orders for e-buses. Further,  the policies of Chinese government favor electric mid- & large buses over ICE ones such as priority access to bus lanes, exemptions from certain traffic restrictions or congestion charges, and preferential parking policies. Under New Energy Vehicle Subsidy Program, it offers subsidies depending on the size and range, for the purchase of new energy vehicles, including electric mid- & large buses. For example, a 12-meter electric bus with a range of 200 kilometers can receive a subsidy of ¥500,000 (USD 75,000). Thus, China will continue to play a key role in the future of both the ebus and overall bus market and with a >40% market share maintained for both through 2030.

Many of the leading players in the electric mid- & large buses market, including BYD (China), Yutong (China), King Long (China), Zhongtong (China), Tata Motors (India), Ashok Leyland (India), JBM Auto Limited (India) and many others are from Asia Pacific. Furthermore, the rapid expansion of the electric mid- & large buses fleet in several countries in this region is also a key driving factor for the region to dominate the electric mid- & large bus market. The reduction in the batteries and EVs cost, and the development of charging infrastructures, also provide a great opportunity for the growth of the electric mid- & large bus market. Many countries in the Asia Pacific region, including China, South Korea, India, and Japanese markets, have favorable government policies and mandates that promote the reduction of emissions and usage of green technology in public transportation.

China, being the largest market for automobiles in the world and with the intention of being the number one electric vehicle market, has been in the forefront in this market since 2009. In August 2022, the government of Hainan province proposed a complete ban on the sale of combustion cars by 2030 in its implementation plan for peaking carbon emissions. The amount of the subsidy depends on the size and fuel efficiency of the vehicle. For example, a 12-meter electric bus with a fuel efficiency of 1.2 kilometers per kilowatt-hour can receive a subsidy of ¥300,000 (USD 45,000).

Most of the Chinese electric mid- & large bus players such as BYD are equipped for to manufacture a greater number of components in-house, mainly to reduce the expenses and ensure the quality. The Chinese OEMs including King long and Yutong are turning to export market to keep their manufacturing facilities running at high utilization rates.

Key Market Players

The key players in the electric mid- & large bus market BYD (China), Yutong (China), CAF (Solaris) (Spain), VDL Groep (Netherlands), and AB Volvo (Sweden). The key strategies adopted by major companies to sustain their position in the market are expansions, contracts and agreements, and partnerships.

To analyze and forecast the trends and orientation for the electric mid- and large (9-14m) bus market in the global industry.

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Scope of the Report

This research report categorizes the electric mid- and large (9-14m) bus market based on Application, Propulsion Type, and Region.

Based on Application:

• City/Transit Bus
• Coaches
• Midi Bus
• School Bus

Based on Propulsion:

• BEV
• FCEV
• HEV/PHEV
• Diesel/Gasoline/CNG-LNG

Based on the Region:

• Asia Pacific
• North America
• Europe

Recent Developments

• In January 2022, the Valley Transportation Authority (VTA) in Santa Clara City, US, will install an innovative clean energy microgrid and EV fleet charging system with Proterra and Scale Microgrid Solutions. This project will showcase how clean energy paired with fleet-scale EV charging can enable the adoption of fully electric vehicle fleets. Expected to come online in late 2023, it will help VTA further reduce greenhouse gas emissions.
• In January 2023, Daimler received an order to supply 45 buses to VLP Transport for intercity transport.
• In September 2022, the Urbino 18 model is equipped with a modern hydrogen fuel cell, which aids long-distance commuting as it can cover 350 km in a single refill with a passenger capacity of 138 seats.

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