Within the next seven years, nearly half of the buses used by municipal transit districts will be electric, with China playing a leading role.
That comes from a new study by Bloomberg New Energy Finance. The study predicts that last year’s sale of 386,000 electric buses will go up to 1.2 million by 2025. China will account for 99% of the world’s electric buses by that time.
“China will lead this market, due to strong domestic support and aggressive city-level targets,” wrote Aleksandra O’Donovan, an analyst for BNEF and author of the study.
Diesel-powered buses were the norm for several decades in municipal bus fleets and with private coach operators. Owners appreciated the performance of diesel engines, broad accessibility to fuel pumps, and the competitive cost of diesel fuel.
In recent years, municipal transit agency buses powered by compressed natural gas took away some of the market share that diesel buses had dominated for years. Fleet operators were impressed by the reductions in air pollution for compliance with federal, state, and local regulations offered by bringing compressed natural gas (CNG) buses into their fleets. Cost of operation became more reliable, with natural gas providing a stable fuel price. That helped CNG-powered buses see sales growth when the pump prices of diesel and gasoline shot up in 2008 through 2010. Related: OPEC-Russia Deal Could Extend Until H1 2019
Electric buses may take away some of the market share from both diesel and CNG buses. While electrified buses are more expensive in upfront costs than diesel and CNG buses, the BNEF study found that all-electric buses can offer lower total cost of ownership through their vehicle lifecycles. The cost of fuel and maintenance expenses can be much lower. Electric buses are much easier to maintain and require less parts replacement than diesel- or natural gas-powered buses.
The BNEF study forecasts that expected declines in lithium battery prices will make electric buses more competitive with diesel buses by 2026.
Battery-powered buses also make a visible, massive presence on a city’s streets. Observers will read about the buses being electrified, which can stir up their interest and research even more. Electric buses convey a local government committed to making air quality improvements, finding savings in operating costs, and taking action to make the municipal transit agency look more innovative and committed to integrating new technology.
China’s new energy vehicle policies have been behind electric bus sales strength, and expectations that it will grow over the next decade. BYD Co., China's largest seller of electric vehicles and backed by Warren Buffett’s Berkshire Hathaway, is well-positioned to take advantage of government incentives. Last year in China, BYD sold 128,000 new energy vehicles, which include all-electric and plug-in hybrid passenger and commercial vehicles. That went up from 100,183 in 2016.
BYD’s electric buses now operate in 200 cities around the world.
As for China, BYD and another domestic bus maker, Yutong, are dominating electric bus sales. While BYD is the largest global electric vehicle manufacturer, Yutong is the largest overall bus maker in China.
Not long ago, BYD supplied 20 electric coaches to two Macao tourism enterprises in China. The company continues to be active in other global markets, including supplying buses in the U.S. to transit districts. BYD just announced it will supply 11 BYD ADL Enviro200EV single-deckers operated by Go-Ahead London for the Transport for London. They’ll be similar to other BYD electric buses already on London roads operated by Go-Ahead London.
Another study calls into question rapid growth of electric bus sales in China. This year will see changes as policy from national and local/city governments start to collide, according to a Clean Technica report.
Last year’s electric bus sales dropped from 115,700 sold in China in 2016 to 89,546 in 2017 due to policy changes and incentives being cut back during that time. This year will see changes as policy from national and local/city governments start to collide, according to the report. Hydrogen fuel cell buses will see an increasing trend as Chinese governments provide more support and subsidies.
The Bloomberg report is taking a more optimistic view overall on electric bus growth, with China supporting electric buses aggressively. Buses make a lot of sense for policy makers at the national and local levels. They serve routine, fixed routes, making them ideal for going the electrified vehicle pathway. Charging stations can be set up at bus stations and built into the schedule.
China’s national and city governments are pushing for cleaner air, making electric buses an attractive option. That’s being seen around the world, with mayors in Paris, Amsterdam, Los Angeles, and San Jose, Calif., urging environmental regulators to roll out incentives and requirements pushing for growth in electric buses.
By Jon LeSage
More Top Reads From Oilprice.com:
- The U.S. Could Set 5 Energy Production Records This Year
- The World’s Largest “Virtual Power Plant”
- Russian LNG Cargo Sparks Doubt About U.S. Energy Dependence