Cleantech Market Intelligence
E-Bus Market Looks for Growth
Early 2013 has brought a slew of “reassessments” of battery vehicle prospects, as some industry commentators have decided that the nascent plug-in vehicle (PEV) market is already a failure. Pike Research has already countered this doom-and-gloom, showing that the PEV market is poised for growth similar to that of the hybrid market. Undoubtedly PEV sales have been lower than some OEMs and their battery suppliers had projected, leading to overcapacity in the lithium ion battery sector. Battery manufacturers are looking for solutions to this problem in the near-term as well as hedging their bets should PEV demand not rebound. Can the electric bus sector help take up some of this overcapacity?
For the near-term, the answer is no. As I discussed in my Electric Drive Buses report, the battery bus market is quite immature in most parts of the world, except China. China has made battery bus development and deployment a key element of its industrial policy, in order to exploit the country’s vast lithium resources. Nearly all major bus producers in China have battery bus products, and hundreds of e-buses have been deployed. Unfortunately this near-term promise is limited to China, since transit bus specifications in North America and Europe are quite different than for China’s buses. Chinese battery and vehicle manufacturer BYD has been most aggressive in pursuing developed-country markets, with deals in Windsor, Ontario and the Netherlands, among others. However, taking a serious share of these markets remains far off. As a start, BYD is building a manufacturing facility in California to comply with U.S. Buy America laws for selling buses to U.S. transit agencies. In January, BYD received approval to sell its electric buses in the European Union; the company established manufacturing in Bulgaria to serve this market.
A handful of small companies offer electric buses in North America, but of the mainstream bus manufacturers, New Flyer and Nova Bus have each unveiled prototype electric buses, but these are still early in the testing and demonstration phase. Europe also has a few OEMs, including Optare and PVI, offering small electric buses, but again total numbers are low (dozens, not hundreds). Overall, electric buses will be a niche application for the next several years, due to issues of range, recharging time, and price. Worldwide battery bus sales in 2013 are anticipated to be under 1,000, which will generate around 133,000 kWh of lithium ion battery demand.
Annual Electric Drive Bus Lithium Ion Transportation Battery Capacity by Region, World Markets: 2012-2018
(Source: Pike Research)
Longer term, demand for lithium batteries will grow substantially, hitting 1 million kWh in 2018. Add to this the demand from hybrid and fuel cell buses, and battery buses become an attractive long-term market for battery companies. But it’s not a near-term solution.