Electric Bus Market Size, Share, Growth, Trends, and Global Industry Analysis: By Vehicle Type (Battery Electric Bus, Plug-in Hybrid Electric Bus, Fuel Cell Electric Bus) By Battery Type (Lithium-iron-phosphate, Lithium-Nickel-Manganese-Cobalt Oxide Others) By End User (Private, Public) and Region Forecast 2020-2031

Electric Bus Market size was valued at US$ 9,793.4 million in 2024 and is expected to reach US$ 24,057.8 million by 2031, growing at a significant CAGR of 13.7% from 2025-2031. The market refers to the global industry focused on the production, distribution, and adoption of battery-powered buses designed for public and private transportation. Unlike conventional diesel or gasoline-powered buses, electric buses operate using rechargeable lithium-ion or solid-state batteries, significantly reducing carbon emissions and reliance on fossil fuels. With governments and municipal bodies enforcing stringent emission norms and promoting eco-friendly transportation alternatives, the market has witnessed a surge in investments, technological advancements, and infrastructure development. The adoption of electric buses is further fueled by their cost-effectiveness in the long run, owing to lower fuel and maintenance costs compared to traditional internal combustion engine (ICE) buses.

The market for electric buses has experienced rapid growth in recent years, primarily driven by increasing environmental awareness and supportive government policies such as subsidies, incentives, and investments in charging infrastructure. Asia-Pacific, particularly China, dominates the market due to strong government initiatives and extensive electric vehicle manufacturing capabilities. Meanwhile, North America and Europe are also witnessing accelerated adoption, with major cities committing to transitioning their public transit fleets to fully electric alternatives. Key industry players are continuously innovating, focusing on battery efficiency, extended range, and reduced charging times, which are crucial factors in enhancing the viability and appeal of electric buses globally.

Facts & Figures:

• As of 2024, the adoption of electric buses in the United States has been progressing, particularly within the school transportation sector. By October 2024, over 13,759 electric school buses had been committed across 1,572 school districts and fleet operators, with 4,500 of these commitments made in 2024 alone.

Key Developments:

• In November 2024, Daimler Buses introduced its first battery-electric inter-city bus, the Mercedes-Benz elntouro. This near-series prototype offers a range of up to 500 kilometres, making it suitable for longer distances and higher average speeds, such as those on country roads.
• In March 2024, Volvo Buses launched the Volvo BZR Electric, a global electromobility platform designed for city, intercity, and commuter operations. Offered in various configurations, the BZR Electric aims to maximize efficiency, sustainability, and profitability for operators worldwide, extending Volvo's electromobility solutions beyond urban centres.
• In May 2024, Isuzu Motors launched the ERGA EV, Japan's first battery electric vehicle (BEV) flat-floor route bus. Unveiled at the Japan Mobility Show 2023, the ERGA EV features zero-emission BEV technology and a fully flat-floor design, enhancing accessibility and comfort for urban commuters.
• In October 2024, the Go-Ahead Group, a leading British transport operator, committed to investing £500 million in the procurement of up to 1,200 electric buses from Northern Ireland-based manufacturer Wrightbus. This substantial order is set to support 500 manufacturing jobs at Wrightbus and will facilitate the deployment of zero-emission buses across Go-Ahead's UK operations, including London and other regions, over the next three years. The initiative underscores the UK's dedication to expanding green public transportation infrastructure.
• In December 2024, Solaris, a prominent European bus manufacturer, expanded into the North American market by securing a contract with King County Metro, the public transit agency serving Seattle and its surrounding areas. This strategic partnership marks Solaris' commitment to delivering electric buses in the United States, aligning with King County Metro's objectives to enhance sustainable transit options.
• In September 2023, Volvo Buses announced a partnership with bodybuilder MCV to manufacture bodies for its electric bus models, including the Volvo 7900 Electric and Volvo 7900 Electric Artic.

Electric Bus Maket Segmentation:

Based on the type:

• Battery Electric Vehicle
• Plug-In Hybrid Electric Vehicle
• Fuel Cell Electric Vehicle

Battery Electric Vehicles (BEVs) are the dominant segment in the market, driven by technological advancements, declining battery costs, and strong government support for zero-emission transportation. Unlike Plug-In Hybrid Electric Vehicles (PHEVs) and Fuel Cell Electric Vehicles (FCEVs), BEVs operate solely on lithium-ion or solid-state batteries, eliminating dependence on fossil fuels. With improvements in battery efficiency, range, and fast-charging capabilities, BEVs have become the preferred choice for urban public transportation networks worldwide. In countries like China, India, and the United States, large-scale government initiatives such as subsidies, incentives, and infrastructure development programs are accelerating BEV adoption. For instance, China’s New Energy Vehicle (NEV) policy has led to the deployment of over 600,000 battery-electric buses, making it the largest market globally. Similarly, Europe and North America are investing heavily in expanding charging networks and offering grants to transit agencies for BEV fleet expansion. The declining battery costs, reaching below $100 per kWh, make BEVs more cost-competitive than other electric bus types. Additionally, lower maintenance costs and improved energy efficiency further enhance their appeal. With increasing environmental concerns and policy-driven electrification efforts, BEVs are expected to dominate the market in the coming years.

Based on the battery type:

• Lithium Nickel Manganese Cobalt Oxide
• Lithium Iron Phosphate 

Lithium Iron Phosphate (LFP) batteries are emerging as the leading battery type in the market, primarily due to their superior safety, longer lifespan, and cost-effectiveness compared to Lithium Nickel Manganese Cobalt Oxide (NMC) batteries. LFP batteries are known for their thermal stability and resistance to overheating, reducing the risk of fire hazards, which is a crucial factor in public transportation. Additionally, they offer a longer cycle life, often exceeding 4,000 charge cycles, making them highly durable for electric buses that operate daily on fixed routes. The absence of cobalt in LFP batteries also makes them more sustainable and cost-effective, as cobalt prices are highly volatile and linked to ethical mining concerns. China, the largest market for electric buses, has widely adopted LFP technology, with major manufacturers like BYD and Yutong prioritizing its integration into their fleets. The declining cost of LFP battery production, coupled with advancements in energy density, has further strengthened its market position. While NMC batteries offer higher energy density, making them ideal for long-range applications, LFP remains the preferred choice for urban transit due to its reliability, affordability, and safety features. As a result, LFP technology is expected to dominate the electric bus battery market in the coming years.

Based on the application

• Intercity
• Intracity

Intracity electric buses are leading the market, primarily driven by government initiatives, rising urban pollution levels, and increasing public transportation demand. Major metropolitan areas worldwide are transitioning to electric buses as part of sustainable urban mobility plans, aiming to reduce carbon emissions and dependence on fossil fuels. With cities facing stringent emission regulations, many governments are providing subsidies and incentives to accelerate the adoption of electric buses for daily urban commutes. Municipal transportation authorities are prioritizing electric bus fleets to comply with regulations such as the European Union’s Clean Vehicles Directive and China’s New Energy Vehicle (NEV) policies. Additionally, intracity electric buses are preferred due to their lower range requirements, allowing them to utilize smaller and more cost-effective battery packs. Frequent stops and shorter travel distances within city limits align well with the operational efficiency of battery electric vehicles (BEVs), reducing overall costs and optimizing charging infrastructure. Leading manufacturers, including BYD, Proterra, and Volvo, are expanding their intracity electric bus offerings to cater to increasing demand. As urban congestion continues to rise, along with the need for efficient, low-emission public transport, intracity electric buses will continue to dominate the market, solidifying their position as the primary segment driving electric bus adoption globally.

Based on the end-user:

• Public
• Private

The public sector is the dominant end-user in the market, primarily driven by government initiatives, stringent emission regulations, and investments in sustainable public transportation. Governments across the globe are increasingly prioritizing the adoption of electric buses to reduce urban pollution and carbon emissions, aligning with their climate action goals. Many nations have implemented subsidy programs, tax incentives, and funding schemes to facilitate the transition of public bus fleets from diesel-powered vehicles to battery-electric or fuel cell buses. For example, China, the European Union, and the United States have introduced electrification mandates for public transportation, requiring municipal fleets to integrate zero-emission buses within specific timeframes. Moreover, public transit agencies benefit from economies of scale, enabling them to procure large fleets of electric buses and invest in charging infrastructure. Cities such as Shenzhen, London, and Los Angeles have already deployed thousands of electric buses, significantly reducing fuel costs and enhancing energy efficiency. Additionally, as urban congestion increases, governments are encouraging mass transit solutions, further bolstering the demand for electric public buses. With continued policy support, advancements in battery technology, and increasing investments in smart city mobility, the public sector will continue to lead the global market, driving widespread adoption across metropolitan regions.