The electric vehicle (EV) market has arrived, but the sector primed for biggest growth is the market for electric trucks and buses. While still is in its early days, global demands put it in a promising position to expand steadily in the coming years. Global annual sales are expected to grow by 17 percent compounded annual growth rate (CAGR) through 2030—and that doesn’t include China, which is aggressively electrifying the world’s largest bus market.
“The production of these vehicle technologies is driven by several factors, including fuel efficiency improvements, emissions reduction, energy costs, maintenance, and declining costs for alternative fuel and batteries,” says William Drier, research analyst at Navigant Research.
Urban electric buses are the fastest-growing part of the EV market. As more people move to cities, car sales are expected to peak—while electric bus sales are set to rise to over $275 billion by 2029, according to IdTechEx.
As the world’s largest bus maker, China is at the head of the pack when it comes to e-buses: in 2017, 90 percent of urban bus sales in the country were electric, totaling 97,000. By comparison, the entire European urban bus market (electric and gas-powered combined) was 13,000 units—and in the U.S., only 500 were sold.
As technological improvements make batteries more powerful, the regulatory environment is changing as well—which will benefit the e-bus market. National and local policies are steadily moving towards lower emissions. And as prices drop, e-bus fleets will become more appealing for budget-conscious local governments.
As for trucks, the world has ten times as many trucks as buses. Class 8 vehicles—the massive 18-wheelers crisscrossing the U.S. highway system—are some of the biggest vehicle polluters, and regulatory, technology and market pressures are pointing the sector towards electrification.
But the transition for trucks will be more difficult than for buses. The requirement for large battery capacity to power the vehicles and the lack of available recharging infrastructure for those vehicles currently do not meet the demands for long-haul trucking routes, which limits the vehicles to regional routes.
The market boom extends to energy storage: the electric vehicle battery market is expected to reach $84 billion by 2025, growing at a 17 percent CAGR rate until then. While lithium-ion batteries will continue to dominate, there are concerns about supply and safety—which technological advancements could potentially solve.
All signs point to the next big thing in EVs being, literally, the next big thing as heavy vehicles like trucks and buses join the push to electrification.
Read more about the growing demand for electrified heavy-duty vehicles at What's Inside Chicago's Electrified Buses?