United States Electric Bus Market

United States Electric Bus Market:

The United States electric bus market size reached US$ 1.9 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 5.8 Billion by 2032, exhibiting a growth rate (CAGR) of 12.9% during 2024-2032. The growing environmental concerns, implementation of strict emission control regulations, developing charging infrastructures, and continuous technological advancements are some of the major factors propelling the market growth.

United States Electric Bus Market Analysis:

• Major Market Drivers: Rising government initiatives, increasing environmental concerns, expansion of charging infrastructures, deployment of zero-emission buses, etc., are supporting the industry’s growth. Moreover, electric buses offer lower operating costs compared to diesel buses. This long-term economic advantage is encouraging transit agencies to shift to electric buses, which require less maintenance and have lower fuel costs, thereby escalating the United States electric bus market demand.
• Key Market Trends: Decreased cost of lithium-ion batteries, introduction of various subsidies by government bodies, regulatory pressures, etc., are expected to propel the market growth. Moreover, diesel-powered buses significantly contribute to greenhouse gas emissions, and there is an increasing need to reduce urban air pollution. This is leading to the shift towards electric buses, especially in states like California, which have numerous air quality and climate change mitigation policies.
• Challenges and Opportunities: High initial cost, inadequate charging infrastructures, battery degradation, and significant time required to charge the buses are some of the challenges that the market is facing. However, ongoing research and development in battery technology are leading to improvements in energy density, charging speed, and overall efficiency. These advancements are expected to lower costs and enhance the performance of electric buses over time, thereby bolstering the United States electric bus market revenue.

United States Electric Bus Market Trends:

Rising GHG Emissions

Rising greenhouse gas (GHG) emissions are a significant driver for the growth of the electric bus market in the United States. The shift towards electric buses is motivated by the need to mitigate the environmental and health impacts associated with traditional diesel buses, which are major contributors to urban air pollution and climate change. For instance, according to the article published by Environment America, electric buses emit much fewer greenhouse gases than diesel-, diesel hybrid-, and natural gas-powered buses. Replacing all of the country's diesel-powered transit buses with electric buses could reduce greenhouse gas emissions by more than 2 million tons per year. At the same time according to the U.S. Department of Transportation, electric buses run more silently, emitting less noise pollution, and have no harmful tailpipe emissions, which improves local air quality and lessens air pollution. Moreover, the U.S. federal government, along with many states, has implemented stringent emissions regulations aimed at reducing GHG emissions. Policies such as the Clean Air Act and state-specific mandates, especially in California, require substantial reductions in emissions from public transportation fleets. For instance, in March 2024, the United States Environmental Protection Agency released a final rule revising existing criteria to minimize greenhouse gas emissions from heavy-duty vehicles in model year 2027 and setting new, more rigorous limits for model years 2028-2032. Moreover, in November 2023, the Federal Highway Administration (FHWA) of the U.S. Department of Transportation announced the Low or No Emission Vehicle Program, which provided US$ 5 Billion to replace transit buses with zero-emission electric buses and other low- or zero-emission technologies. These factors are there by contributing to the United States electric bus market share.

Growing Infrastructural Development

Growing infrastructure development is a crucial driver of the electric bus market in the United States. The expansion of charging infrastructure, advancements in grid technology, and supportive government policies are key factors contributing to this growth. The proliferation of electric vehicle (EV) charging stations is essential for the widespread adoption of electric buses. For instance, in May 2024, MTA launched new electric buses on Queens, Brooklyn, and Staten Island that are fitted with charging stations to ensure enough power for charging. In line with this, in 2022, the United States reached a significant milestone of nearly 128,000 EV charging stations. Moreover, advances in fast charging technology allow electric buses to recharge quickly, minimizing downtime and improving operational efficiency. This technology is critical for transit agencies that need to maintain rigorous schedules. For instance, in July 2023, Blue Bird Corporation, the electric and low-emission school bus manufacturer in the U.S., launched its next-generation Vision electric school bus that supports a fast-charging rate of 80kW, at STN Expo West, a leading student transportation industry and technology event in North America. Furthermore, the deployment of V2G technology allows electric buses to return energy to the grid during peak demand periods. This bidirectional flow of energy helps stabilize the grid and can provide additional revenue streams for transit agencies, further incentivizing the adoption of electric buses. For instance, in May 2024, Zūm, the modern student transportation platform, announced Oakland Unified School District (OUSD) to be the first major school district in the U.S. to switch to a completely electrified school bus system with cutting-edge vehicle-to-grid technology. Zum delivered a fleet of 74 electric school buses with bidirectional chargers in Oakland, which can be operated using its AI-enabled technology platform. These factors are further positively influencing the United States electric vehicle market forecast.

Adoption of Hydrogen Fuel Cell Electric Mobility

The adoption of hydrogen fuel cell electric mobility is significantly driving the growth of the electric bus market in the United States. Hydrogen fuel cell buses present a viable and complementary technology to battery electric buses, particularly for long-range and high-demand routes. Hydrogen fuel cell buses emit only water vapor and heat, making them an attractive option for reducing greenhouse gas emissions and improving air quality in urban areas. This aligns with national and state goals for reducing pollution and combating climate change. For instance, according to a report released on February 2024 by Calstart, a national clean transportation advocacy group, there were approximately 6,100 new full-size zero-emission transit buses in the United States in 2023—a 12% increase as compared to 2022. Also, the number of fuel cell electric buses surged by more than 75% in 2023. Moreover, in April 2024, BAE systems, a heavy-duty electric-propulsion provider, announced to provide its next-generation electric drive system to GILLIG, a heavy-duty bus manufacturer in the U.S., for use in its new hydrogen fuel bus line in order to produce zero-emission operation. These factors are further contributing to the United States electric bus market share. These factors are positively impacting the United States electric bus market outlook.

United States Electric Bus Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the United States electric bus market report, along with forecasts at the country and regional levels from 2024-2032. Our report has categorized the market based on propulsion type, battery type, length, range, and battery capacity.

Breakup by Propulsion Type:

• Battery Electric Vehicle (BEV)
• Fuel Cell Electric Vehicle (FCEV)
• Plug-in Hybrid Electric Vehicle (PHEV)
   

The report has provided a detailed breakup and analysis of the market based on the propulsion type. This includes battery electric vehicle (BEV), fuel cell electric vehicle (FCEV), and plug-in hybrid electric vehicle (PHEV).

BEVs are powered entirely by batteries, which are recharged via the electric grid. They produce zero tailpipe emissions, making them a key component in reducing urban air pollution. While FCEVs use hydrogen fuel cells to generate electricity, which powers the electric motor. These buses emit only water vapor, contributing to cleaner air. Moreover, PHEVs combine an internal combustion engine with an electric battery that can be recharged by plugging into an external source. They can operate on electric power for shorter distances and switch to the internal combustion engine for longer ranges, offering flexibility and reducing range anxiety.

Breakup by Battery Type:

• Lithium-ion Battery
• Nickel-Metal Hydride Battery (NiMH)
• Others
   

The report has provided a detailed breakup and analysis of the market based on the battery type. This includes lithium-ion battery, nickel-metal hydride battery (NiMH), and others.

Li-ion batteries have a high energy density, which allows electric buses to travel longer distances on a single charge compared to other battery types. They are lighter and more compact, making them a preferred choice for electric buses where weight and space are critical considerations. While, NiMH batteries have lower energy density compared to Li-ion batteries, which means a shorter range for electric buses. NiMH batteries are known for their stability and safety, with less risk of thermal runaway. They do not contain toxic heavy metals like cadmium or lead, making them more environmentally friendly.

Breakup by Length:

• Less than 9 Meters
• 9-14 Meters
• Above 14 Meters
   

The report has provided a detailed breakup and analysis of the market based on the length. This includes less than 9 meters, 9-14 meters and above 14 meters.

Less than 9 meters electric buses are smaller electric buses that are ideal for inner-city routes, narrow streets, and areas with lower passenger volumes. They are often used for shuttle services, last-mile connectivity, and routes with frequent stops. While 9-14 meters electric buses are the standard city buses used in most public transit systems in the U.S. They are suitable for regular urban and suburban routes, handling moderate passenger volumes. Moreover, above 14 meters electric buses are used for high-capacity routes, including busy urban corridors, intercity routes, and Bus Rapid Transit (BRT) systems. They are designed to accommodate a larger number of passengers and often feature longer ranges.

Breakup by Range:

• Less than 200 Miles
• More than 200 Miles
   

The report has provided a detailed breakup and analysis of the market based on the range. This includes less than 200 miles, and more than 200 miles.

Less than 200 miles range buses are typically used for urban routes, where buses operate within cities with frequent stops and shorter routes. They are ideal for inner-city transit, school buses, and shuttle services. While more than 200 miles range buses are used for intercity routes, longer urban routes, and Bus Rapid Transit (BRT) systems. They are designed to handle higher daily mileage and reduce the need for frequent recharging.

Breakup by Battery Capacity:

• Up to 400 kWh
• Above 400 kWh
   

The report has provided a detailed breakup and analysis of the market based on the battery capacity. This includes up to 400 kWh, and above 400 kWh.

Electric buses with battery capacities up to 400 kWh are typically used for shorter urban and suburban routes. These buses are ideal for routes with frequent stops, such as city transit routes, school buses, and shuttle services. These buses are often more affordable, both in terms of initial purchase and operational costs. They require less charging infrastructure investment and can be easily integrated into existing transit systems. While buses with battery capacities above 400 kWh are designed for longer routes and higher capacity needs. These buses are suitable for intercity travel, longer urban routes, and Bus Rapid Transit (BRT) systems where extended range and higher passenger capacity are essential. Higher battery capacities provide greater operational flexibility and can support routes that require longer distances without compromising on performance. They also support high-capacity transit solutions.

Breakup by Region:

• Northeast
• Midwest
• South
• West
   

The report has also provided a comprehensive analysis of all the major regional markets, which include Northeast, Midwest, South, and West.

According to the United States electric bus market overview, the demand for electric buses in Northeast, Midwest, South, and West region in the U.S. is driven by various factors such as government initiatives, public awareness and support, public-private partnerships, and environmental concerns. Moreover, several states in the Northeast have implemented aggressive clean energy policies and incentives, such as subsidies, tax credits, and grants, to encourage the transition to electric buses. Furthermore, state-level policies and regulations regarding clean energy and transportation infrastructure play a significant role in shaping electric bus adoption rates in the South.

Competitive Landscape:

The competitive landscape of the industry has also been examined along with the profiles of the key players.

United States Electric Bus Market News:

• May 2024: MTA launched new electric buses on Queens, Brooklyn, and Staten Island.
• May 2024: Zum delivered a fleet of 74 electric school buses with bidirectional chargers to Oakland Unified School District.
• April 2024: The United States Environmental Protection Agency (EPA) announced the commencement of its new 2024 Clean Heavy-Duty Vehicles Grant Program, which aims to assist in the transition of heavy-duty vehicles, such as school buses and trucks, to zero-emission models.

United States Electric Bus Market Report Scope:

Key Questions Answered in This Report:

• How has the United States electric bus market performed so far and how will it perform in the coming years?
• What has been the impact of COVID-19 on the United States electric bus market?
• What are the key regional markets?
• What is the breakup of the market based on the propulsion type?
• What is the breakup of the market based on the battery type?
• What is the breakup of the market based on the length?
• What is the breakup of the market based on the range?
• What is the breakup of the market based on the battery capacity?
• What are the various stages in the value chain of the industry?
• What are the key driving factors and challenges in the industry?
• What is the structure of the United States electric bus market and who are the key players?
• What is the degree of competition in the industry?

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the United States electric bus market from 2018-2032.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the United States electric bus market.
• The study maps the leading, as well as the fastest-growing, markets. It further enables stakeholders to identify the key country-level markets within the region.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the United States electric bus industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.