The global electric bus market is on a high-powered growth trajectory, projected to skyrocket from $35.3 billion in 2021 to $439.7 billion by 2031, according to a new report released by Allied Market Research. This stunning CAGR of 29.5% underscores the booming demand for clean, sustainable transportation solutions amid rising environmental and regulatory pressures worldwide.
Asia-Pacific—led by China—dominated the market in 2021, with rapid urbanization, government subsidies, and key players such as BYD Auto Co. Ltd. driving widespread adoption. Meanwhile, Europe and North America are following suit with major public transit overhauls and fleet electrification plans.
Stringent emission regulations, declining battery costs, and generous government incentives are fast-tracking electric bus deployment worldwide,” the report states.
Global Green Initiatives Drive Market Expansion
Governments in key regions are investing heavily in electric mobility. Notably:
- India approved the addition of 300 low-floor electric buses in Delhi, with phased deliveries beginning in late 2021.
- London expanded its hybrid and electric bus fleet to over 4,300 units by 2021, aiming to fully electrify by 2027.
- Hyundai partnered with Iveco Group to mass-produce hydrogen fuel cell buses in Europe, targeting over 3,000 low-emission units by 2026.
Market Highlights by Segment:
- Propulsion:
Fuel Cell Electric Vehicles (FCEVs) are expected to see the fastest growth, emitting only water and requiring less city infrastructure than battery-powered buses. - Length:
Buses over 14 meters in length are gaining traction, ideal for high-capacity, long-haul routes. - Range:
Models with 300+ miles range are rising in demand, suited for intercity and regional transit. - Battery Capacity:
Buses with 250+ kWh batteries are emerging as the preferred choice for extended operations. - Power Output:
Vehicles exceeding 250 kW in output are anticipated to dominate due to performance advantages. - Regional Outlook:
The LAMEA region (Latin America, Middle East, and Africa) is poised for the highest growth rate, driven by new infrastructure projects and government reforms.
Challenges and Opportunities
While the market outlook is overwhelmingly positive, high upfront costs and a lack of charging infrastructure in developing regions pose temporary challenges. However, opportunities abound in autonomous e-buses, smart grid integration, and next-gen battery technology.
Despite COVID-19 disruptions in early 2020, the sector showed remarkable resilience. The pandemic-era focus on clean air and safe public transport reignited EV investments, especially in China, the U.S., and Europe.
Leading Players in the Electric Bus Market:
- BYD Company Ltd.
- AB Volvo
- Daimler AG
- Proterra
- NFI Group Inc.
- Yutong Group
- VDL GROEP BV
- Zhongtong Bus Holdings Co., Ltd.
- Construcciones y Auxiliar de Ferrocarriles (CAF)
- Ankai Bus
