Future trends of electric bus industry & key challenges for public transportation


The electric bus industry is at the forefront of transforming global commercial mobility, even across countries where sustainable transportation solutions are simply gaining acceptance. Ongoing concerns over global warming and rising CO2 emissions have prompted countries to switch to green mobility, boosting demand for electric vehicles (EVs). Being a sustainable mode of transportation, an electric bus can significantly reduce GHG emissions by reducing air and noise pollution. These vehicles are constantly replacing traditional diesel-powered buses, as they are more efficient and lower operating costs.

By switching to e-buses, large corporations can save a fortune on fuel costs as well as maintenance, as these vehicles have less moving parts. One study claims that battery-powered electric buses offer a 1.4 to 7.7 times better range than diesel buses, which typically offer a range of 4.8 miles per gallon. To take things a step further in the driving field, electric bus companies like Ibusco are taking inspiration from the aerospace sector to create e-buses using composite materials. The use of such materials can help manufacturers to build buses that provide 33% lighter and better insulation than steel adversaries.

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It is estimated that the size of the global electric bus market could reach 53 billion by 2027, driven by the continued efforts of local and international organizations to encourage sustainable mobility. A report released by The International Energy Agency (IEA) claims that global EV stocks could expand to 115 million vehicles by 2020 and 145 million by 2030. E-buses could make up a significant portion of this number due to growing environmental awareness. Electrical mobility and supportive government initiatives to tackle climate change will accelerate the electrification of the public transport system.

The future of electric bus public transport

Although battery-electric buses are in many ways superior to their diesel counterparts, public transport companies have some problems with its extensive deployment. Problems such as the short driving range of e-buses that reduce the likelihood of long journeys and the lack of adequate charging infrastructure in small towns are to some extent hindering the large-scale installation of these vehicles.

However, the market share of the electric bus from the public transport segment will be supported by heavy funding through local authorities to support green initiatives and tackle climate change. To cite an example from the US, in 2021 the Virginia Department of Environmental Quality provided $ 4.4 million in state funding to purchase new all-electric buses, trash and recycling trucks in Fairfax County to fight transportation electrification and air pollution.

Similarly, the California Energy Commission (CEC) has provided a $ 4-million grant to the NCTD (North County Transit District) to support the installation of a hydrogen fuel station and up to 50 hydrogen fuel-cell electric buses. It was a big leap towards the goal of converting the entire fleet of the district to zero-emissions by 2042.

Emerging demand for electric school bus

The coming years are expected to see a strong demand for electric school buses in the face of growing concerns about the impact of diesel emissions on children’s health. According to the EIA, more than 25 million children in the United States travel to school by bus, with diesel emissions from these vehicles accounting for about a quarter of total emissions from the transportation sector.

By switching to clean fuels and technology for school buses, children can have lower exposure to harmful pollutants and achieve better health. Growing uncertainty between school authorities and parents about child health and safety could encourage the adoption and demand for electric school buses in the long run. In 2021, First Student, North America’s largest student transportation provider, placed the largest order for its electric school bus, under which it will purchase 260 all-electric school buses from commercial vehicle manufacturer, Lion Electric Company.

What will be the future of the electric bus market in India?

The installation of electric buses is accelerating at a steady rate in developing economies like India, as public bodies and consumers are becoming aware of the myriad benefits of switching to electric mobility. For example, initiatives taken by the Government of India, such as the second phase approval of the ‘FAME’ scheme to install 5,095 electric city buses, strengthen the country’s goal of converting public transit fleets to EVs.

To increase the domestic production of EVs, the government is collaborating with private companies and OEMs. In 2020, Tata Motors delivered 26 new electric buses to BEST (Greater Mumbai Electric Supply and Transport) in Mumbai as part of a larger order of 340 electric buses under the Government of India’s FAME II initiative. Similarly, electric bus manufacturers Olectra Greentech and Evey Trans Private Limited (EVEY) placed an order for 100 electric buses from the State Transport Corporation (STC) under the FAME-II scheme.

Although the Government of India has set a policy to deploy 30% EVs by 2030, some factors such as poor financial position of certain states and the fact that more than 90% of buses are currently operated by private companies may hinder the achievement of this goal. However, as a solution, the implementation of charging stations for electric buses and more people preferring public transport over private cars and cabs, could support the transformation of India’s electric mobility solution, which will expand the size of the regional electric bus market in the coming years.

A major challenge for the electric bus industry

The energy required to charge electric vehicles is usually generated by coal-fired power plants in most countries. This practice has raised concerns among environmentalists and consumers about the overall environmental benefits of electrical mobility. A study conducted by researchers at the Indian Institute of Technology-Bombay (IIT-B) claimed that adding electric vehicles to the Mumbai Metropolitan Region (MMR) could increase CO2 emissions by 7-26% without the integration of sustainable power generation. 2050

Many researchers from other countries are focusing on the same subject. However, recent research from the University of Exeter and Cambridge provides some answers to this problem, concluding that the use of electric vehicles reduces the carbon emissions even when charged using electricity generated from fossil fuels. The study added that driving an electric car provides more environmental benefits than conventional petrol vehicles and estimates that by 2050, half the cars on the road could be electric, reducing global CO2 emissions by 1.5 gigaton per year.

With the growing need for sustainable means of transportation worldwide, the electric bus market is poised to become a leading investment destination in the next decade. Although intercity public and commercial transportation has emerged as the primary and easiest goal for e-bus manufacturers, advances in battery technology and increasing access to charging infrastructure could expand technology adoption across intercity travel. Production and installation of all-electric buses is expected to grow significantly in developed regions such as North America, as well as in emerging economies such as India.



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