Increasing Government Focus on Public Transport Electrification Expected To Drive Electric Buses Market

Government policies have a significant influence on the adoption of Electric Vehicles (EVs), including electric buses. As countries strive to reduce carbon emissions and transition to sustainable transportation, policy frameworks have emerged as powerful tools to drive the uptake of EVs. Electric buses have already penetrated key cities around the world, supported by national and local policies to curb air pollution. Policy measures promoting electric buses are diverse, including competitive tenders, green public procurement programs, purchase subsidies, direct support for the deployment of charging infrastructure, and effective pollutant emissions standards.

There is an increasing policy focus on the Heavy-duty Vehicle (HDV) segment, which comprises medium freight trucks, heavy freight trucks, and buses. Almost 70% of global HDV sales are now covered by EV policies. Countries are increasing funding, committing to Zero-emission Vehicle (ZEV) deployment targets, and enacting HDV-specific policies for the first time. In 2022, 11 countries signed the global Memorandum of Understanding (MoU) on zero-emission medium and heavy-duty vehicles, bringing the total number of signatories to 27. These countries aim for 100% zero-emission new truck and bus sales by 2040. Several countries have already incentivized the purchasing of commercial electric vehicles. For instance, California’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) is accelerating market transformation by incentivizing the purchase of zero-emission heavy-duty trucks and buses for California, U.S. fleets by providing vouchers to purchasers and lessees for eligible vehicles on a first-come-first-served basis.

In addition, various countries are promoting the electrification of commercial vehicles for cleaner transport. For instance, in February 2024, the state-run Thailand Board of Investment announced tax incentives for the introduction of electric trucks and buses in company fleets. Also, in 2021, the Maharashtra Electric Vehicle Policy was approved to promote Battery Electric Vehicles (BEVs) in the State of Maharashtra, India. The policy targets six urban agglomerations, i.e., Mumbai, Pune, Nagpur, Nashik, Aurangabad, and Amravati in the state of Maharashtra, to achieve 25% electrification of public transport by 2025.

Conclusion

Government policies for reducing the upfront acquisition costs of battery-electric buses and electrifying public transport are encouraging the adoption of electric buses. Therefore, increasing government investment in various incentive policies, charging infrastructure, and the adoption of electric buses is expected to generate demand for the electric buses market.

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