A number of factors such as the surging environmental concerns, increasing implementation of emission norms, escalating government support for electric vehicle (EVS), and plunging battery prices are expected to drive the electric bus market at a CAGR of 16.6% during the forecast period (2018â€“2025). According to P&S Intelligence, the market size will reach 331,327 units by 2025. In recent years, the mounting focus of leading players on geographical expansion has become a major market trend.
At present, the market growth is primarily being driven by the soaring public awareness about greenhouse gas emissions. The vehicles powered by petrol and diesel are major emitters of such gases, which are largely responsible for the deteriorating air quality levels. Moreover, with the signs of climate changing becoming more prevalent, many governments are encouraging people to shift from fossil fuels to new energy sources such as electricity. The government aims to mitigate air pollution by enacting stringent norms that mandate the phasing of oil and gas-powered vehicles and replacing them with electric variants.
Another growth driver for the electric bus market is the growing focus of countries on cutting down crude oil imports, owing to the rising environmental concerns and high costs associated with crude oil. As a significant portion of imported crude oil in most of the countries is used in their public transport fleets, private and public transit organizations are focusing on deploying electric buses in their fleets. Even though the initial cost of electric buses is quite high, their lower maintenance and operating costs are making them more popular than diesel-powered buses.
Geographically, the Asia-Pacific (APAC) electric bus market generated the highest revenue in 2017, wherein China accounted for the largest share. Additionally, the region is also expected to retain its dominance throughout the forecast period. This can be primarily credited to the consolidation and concentration of key market players in China. Moreover, the toughening emission laws and soaring environmental concerns will also boost the integration of electric buses in public and private transport fleets in the forthcoming years.
Thus, the mounting air pollution concerns and escalating focus of countries on reducing crude oil imports will facilitate market growth in the foreseeable future.