Demand for electric buses expected to grow 25 percent annually

The hybrid bus business is booming, as cities look for ways to lower greenhouse gas emissions and pollution, according to a PikeResearch study released Wednesday.

PikeResearch, which analyzes clean technology markets, estimates that the global market for electric drive buses will grow more than 25 percent annually over the next six years. While China will drive the majority of these sales, the study projects that North America will increase its public transit funding levels and investment in electric buses as it recovers from the economic downturn. The increase in interest is a result of advancing technology and concern about climate change linked to carbon emissions.

But the report cautions that this growth will need an initial public policy push, because of the upfront investment required.

“The biggest challenge for electric drive technologies has been the cost premium over a conventional diesel bus or a compressed natural gas bus,” authors of the research report.

Electric drive technologies, which can include hybrid systems, battery electric or fuel cells, historically have been more expensive initially, even though their fuel economy generates savings.  In the North American market, hybrid buses cost about $200,000. Hybrids need to show fuel economy improvements of about 40 percent in order to make up for this initial investment, according to the report.

Fuel cells and battery electric buses are still in the development stage, with the cost of needed batteries and ultracapacitors still a barrier to wider usage. The growing interest in electric buses is expected to create an increased demand for the lithium ion batteries, one of the ways that electric buses can be powered. PikeResearch estimates that this demand will grow 42 percent annually over the six years.