The Chinese electric bus market has seen significant growth, growing from just 4,100 units to 105,000 units during the period from 2013 to 2017, a CAGR of 125%. Government support in the form of subsidies has been a major driver for the market during this period. However, the market saw a decline in sales in 2017 due to changes in government subsidies, which aim to halt subsidies altogether by 2020. Phasing out subsidies altogether will continue to hamper the Chinese electric bus market over the next few years. However, falling battery prices will help to offset the loss of subsidy benefit during the forecast period (2018-2025).
Exhibit1: Electric Bus Sales in China, 2013-2017, ‘000 Units
Government ‘Push’ – A Major Driver for the Market
Most decisions to purchase electric buses are taken by politicians and other government officials at central or state levels. The Chinese government’s commitment to replace conventional buses by electric ones is benefiting the Chinese electric bus market. For instance, in 2009 Shenzhen was used as a pilot city for energy conservation, and two years later, introduced the first electric bus in the city. By December 2017, all buses in the city were converted to electric ones.
Like the conventional bus market, local players dominate the Chinese electric bus market. Nevertheless, the market is fragmented with the top three players – Yutong, BYD and Zhontong accounting for less than 50% combined market share. Leading players – BYD and Yutong are expected to increase their market shares in future, with Chinese government subsidies focusing on technologically advanced e-buses.