The electric bus industry is poised to revolutionize commercial mobility globally, even in countries where sustainable transport solutions are still gaining acceptance. Due to increasing concerns regarding global warming and rising CO2 emissions, nations have been urged to switch to green mobility, leading to a surge in demand for electric vehicles (EVs). Electric buses, being a sustainable mode of transportation, can significantly reduce GHG emissions while lowering air and noise pollution, which has led to their gradual replacement of traditional diesel-powered buses. This is because electric buses are highly efficient and entail lower operating costs, resulting in large organizations saving a fortune on fuel costs and maintenance since these vehicles have fewer moving parts.
Studies show that battery-operated electric buses offer between 1.4 to 7.7 times better range than diesel buses, which normally give a range of 4.8 miles per gallon. To further enhance the driving range of electric buses, companies like Ebusco are developing e-buses using components made from composite materials, inspired by the aerospace sector. The use of such materials can help manufacturers build buses that are 33% lighter than their steel counterparts while providing better insulation.
The global electric bus market size is expected to reach a valuation of $53 billion by 2027, fueled by local and international agencies' consistent efforts to boost sustainable mobility adoption. According to a report published by The International Energy Agency (IEA), the global EV stock could expand from over 11 million in 2020 to 145 million vehicles by 2030, and electric buses could form a significant part of this number. The rise in awareness regarding the environmental benefits of electric mobility and supportive government initiatives to tackle climate change will accelerate the electrification of public transportation systems.
Although battery-electric buses are superior in many ways to their diesel counterparts, certain problems faced by public transportation companies regarding their mass deployment remain. For instance, issues like the shorter driving range of e-buses that lower the possibility of longer commutes and the lack of adequate charging infrastructure in smaller towns are impeding the large-scale deployment of these vehicles to some extent. However, heavy funding from local authorities to support green initiatives and tackle climate change will continue to drive the electric bus market share from the public transport segment.
Rising concerns regarding diesel emissions' impact on children's health have led to an expected robust demand for electric school buses over the coming years. In North America, First Student, the largest student transportation provider, placed its largest order of electric school buses, under which it will purchase 260 all-electric school buses from commercial vehicle manufacturer, Lion Electric Company.
The deployment of electric buses is accelerating at a steady rate in developing economies such as India as public organizations and consumers become aware of the numerous benefits of switching to electric mobility. The Indian government has sanctioned the second phase of the ‘FAME’ scheme, which entails the deployment of 5,095 electric city buses, reinforcing the country's aim to convert its public transit fleet to EVs. Collaboration with private organizations and OEMs to boost in-house production of EVs will further accelerate India's transition to electric mobility solutions, expanding the regional electric bus market size over the coming years.
However, a key challenge facing the electric bus industry is the energy required to charge electric vehicles, which is usually generated by coal-fired power plants in most countries. This practice has raised concerns among environmentalists and consumers regarding the overall environmental benefits of electric mobility. Researchers across the world are currently focusing on this issue.
As the need for sustainable means of transportation gathers pace globally, the electric bus market is poised to become a leading investment area over the next decade. While intracity public and commercial transport emerged as a primary and easier target for e-bus manufacturers, improvement in battery technology and growing access to charging infrastructure could expand the technology adoption across intercity travel. The
production and deployment of all-electric buses can be expected to rise significantly across developed regions like North America, as well as emerging economies like India. While challenges remain, such as the need for sustainable power generation and adequate charging infrastructure, the shift toward electric mobility is gaining momentum and presents a compelling opportunity for investment in the electric bus industry.