2024-02 SUSTAINABLE BUS

OUTLOOKS
Growth in electric bus
sales leads to a subsequent
increase in component
sales. Europe, defined
as the EU 27 plus the UK,
had forecast component
powertrain sales of $0.73
billion in 2023 (preliminary
figures), with $1.03 billion
forecast for 2026 and $1.38
billion for 2030. The fastest
growth period is from 2023
to 2025 as electric buses
start to become the preferred
choice (rather than
diesel) in some countries
in Europe.
POWERTRAIN BUS REVENUE TO HIT $1BN IN EUROPE
THE VALUE OF
POWERTRAINS
E-bus powertrain revenue are set to grow fast
until 2025. The princing issue and the move
towards in-house production may upset the
apple cart, according to Interact Anaysis
The revenue from powertrain components
is forecast to reach a billion
US dollars in 2026 in Europe
(and a billion euros in 2027 at the
present exchange rates), according to Interact
Analysis’ latest research. This is for
BEV buses only, which dominate, and excludes
a smaller amount of business in electrified
hybrid and hydrogen buses.
The fastest growth period is from 2023 to
2025 as electric buses start to become the
preferred choice (rather than diesel) in some
countries in Europe. In countries with strong
government support, battery electric buses
have reached a point where they can be very
successful, as product availability, low running
cost and clean air targets should combine
to see a lot of sales. Some places, such
as the Netherlands and much of Scandinavia,
already see battery electric as the default
choice for a bus and we expect that this will
steadily become the case in other countries
over the next few years, including France,
Germany and the UK.
Electrification spreading in Europe
It is not just Western Europe that is seeing
bus electrification though. Eastern Europe is
not necessarily slower and has seen some
very significant deals, so understanding
where growth will be faster and where it will
be slower is arguably a case of analyzing
country by country and city by city rather
than looking at regions within Europe.
From 2026 we forecast slower growth for
electric buses as some cities and countries
will already have a high percentage of new
buses electrified by 2026.
This growth in electric bus sales leads to a
subsequent increase in component sales.
Europe, defined as the EU 27 plus the UK,
had forecast component powertrain sales of
$0.73 billion in 2023 (preliminary figures),
with $1.03 billion forecast for 2026 and
$1.38 billion for 2030.
Europe to stay behind China
China already has a >$3 billion annual powertrain
component market for buses (referring
here to components sold for buses registered
within China, not sales of Chinese
buses or components to Europe). This is due
to a much higher percentage of new buses
being electric, so Europe will still be well behind
China, even in 2026. However, electric
buses in Europe are becoming more common
than in many other parts of the world.
Of the total bus sales per year in Europe (40-
50,000), we expect over 14,000 to be electric
in 2030. This is mainly due to low adoption
of electrification for rural and intercity buses.
Urban buses will predominantly be battery
electric by 2030, in line with negotiations
at EU level (not yet concluded at the time
of printing this magazine issue) for full zero
emission city bus market in 2035 with intermediate
target of 90% in 2030.
China also has much lower component
pricing than Europe. If Chinese companies
manage to make inroads into the
European market for completed battery
packs (rather than just cells), motors and
other products, prices could fall. In the
long term, Chinese companies may be
capable of winning a high share.
However, at the moment, the political environment,
the time to setup operations, and
the fact some companies are not yet well
Interact Analysis is a
market research firm with
a specific department for
truck, bus and off-highway
electrification. Here on
Sustainable Bus Magazine
we host a contribution
from the research analyst
Jamie Fox.
known, means that in the next few years
the share of Chinese companies will remain
low for many products. However, the price
gap is very large – as more people come
to understand that Chinese products can
be half price rather than 10% less – these
products may eventually start to command
attention. However, of course these are
prices for sales within China. As Chinese
companies have to pay for overseas sales
and marketing, travel to Europe, shipping
and the costs of complying with European
regulations the price advantage does reduce
substantially, but even so, Chinese products
are likely to remain significantly less expensive
than those from most other countries
including from within Europe.
Leading battery pack providers for on-road
vehicles (including trucks and sales outside
Europe) ranked in Interact Analysis’ 'Electrified
truck and bus components – 2023'
report include BorgWarner (Akasol), BMZ,
BYD, CATL, Forsee Power, Northvolt,
SAFT and Xalt Energy. These companies
have expanded their offerings, however the
market is quite diverse and there are many
smaller suppliers in-play with no single
dominant company.
For other components, ZF has excelled for
several years with its portal axle products,
although it currently faces strong competition
in buses from central drive designs.
Bosch is another company well placed to
address the market for powertrain components
in electric vehicles in on-road vehicles.
There is also still time for new entrants
to disrupt the market or for existing players
to carve out a strong niche.
A in-house trend?
In addition, there are also some companies
that produce components in-house
(i.e. vehicle manufacturers that produce
their own components). Interact Analysis
forecast’s this trend to grow, with inverters,
battery packs and PDUs being some
of the components that are increasingly
being planned for in-house production
14
15