China Electric Bus Market Share, Revenue, Growth, Global Foresight And Key Growth Drivers
The increasing replacement sales of buses in China is resulting in the rising demand for electric buses. About one-third of the few million buses/coaches in China, accumulated over the last decade, are more than five years old. These conventional buses are predicted to be replaced by new electric buses in the coming years. In addition to this, the government of the country is increasingly focusing on increasing the number of electric buses in the transportation system. The penetration of electric buses is expected to be faster than that of other electric vehicles, such as cars, as persuading hundreds of bus operators to choose for the new technology is easier than convincing millions of car buyers to do the same.
According to a
report by P&S Intelligence, in 2017, the electric bus sales in China were
104.3 thousand units, which is expected to reach 176.4 thousand units by 2025,
growing at an 8.6% CAGR during the forecast period (2018–2025). The three type
of electric buses are hybrid electric bus, battery electric bus, and plug-in
electric bus. Out of these, the largest demand was created for battery electric
buses during 2015–2017 and the situation is projected to remain the same in the
coming years as well, which is attributed to the increased government support
for these buses. The fastest growth in demand is expected to be witnessed by
the plug-in electric buses during the forecast period.
The two major
battery types utilized in electric buses are lithium nickel manganese cobalt
oxide (NMC) and lithium-iron-phosphate (LFP). Between these two, the largest
demand was created for LFP during 2013–2017 and the situation is projected to
remain the same in the coming years as well. The fastest growth in demand is
expected to registered by the NMC battery type during the forecast period. This
is attributed to the inclusion of these batteries in the subsidy scheme and the
advantages that these batteries provide over LFP batteries, such as higher
energy density and lower self-charge.
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The declining
costs of batteries and improved operational efficiencies are a key driving
factor of the Chinese electric bus market. As per the industry experts, the
average price of lithium-ion battery cells reduced from $540/kWh in 2012 to
$140/kWh in 2016. The battery accounts for approximately 40% of the electric
bus manufacturing cost, thus the reduction is battery prices would aid the bus
companies in keeping the prices under check. Furthermore, the increasing
production of batteries in China is further projected to lower their prices in
the near future, which, in turn, will result in rising adoption of electric
buses.
The Chinese
government is introducing different subsidy schemes for improving the quality
of electric buses. The subsidy scheme that was introduced in 2017 focused extensively
on the upgradation of battery technology and performance. Different performance
parameters of battery include electric range, energy density, energy
efficiency, and fast charging capacity. This increased emphasis of the scheme
on battery technology is predicted to encourage manufacturers and original
equipment manufacturers to improve the different battery parameters in their
products, which will further drive the Chinese electric bus market.
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