Market Trends of North America School Bus Industry
Industry’s Shift Toward the Adoption of Electric School Buses
School buses play a vital role in the daily transportation of students across the United States, covering an extensive network of approximately 480,000 buses that collectively travel nearly 3.5 billion miles each year, reaching every corner of the nation.
However, the majority of the aging school bus fleet in North America relies on conventional fuels like gasoline, diesel, or propane, which contribute to harmful emissions of criteria pollutants and greenhouse gases, posing risks to both the environment and the health of students.
To address these challenges, there has been a notable shift toward electric buses driven by government support and increasing demand for emission-free public transportation solutions. The Environmental Protection Agency (EPA) of the United States launched the Clean School Bus Program in May 2022, pledging a substantial investment of USD 5 billion over five years to deploy zero-emission school buses nationwide, with a focus on underserved communities. Government agencies, school districts, and bus manufacturers are actively exploring electric school bus (ESB) technology to mitigate the negative impacts of fossil fuel-powered buses. Advancements in battery technology and the introduction of advanced electric buses present promising opportunities for the industry.
For instance, GreenPower Motor Company Inc. inaugurated a new manufacturing facility in South Charleston, West Virginia, in August 2022. This facility, spanning 80,000 square feet, is dedicated to producing fully electric school buses to cater to the growing demand on the US East Coast.
Electric buses are gaining traction as a preferred alternative to conventional diesel buses due to their zero-emission operation and significantly lower annual operating costs. Consequently, many cities and districts across North America, with California leading the way, are actively exploring the adoption of electric school buses, aligning with broader efforts to promote sustainable transportation solutions.
This trend underscores the expanding utilization of electric school buses across various states.
United States is Expected to Grow at a High Rate
Buses are rapidly gaining traction in the United States as a result of widespread adoption by school districts, municipal governments, and private partners. There were approximately 26,727 high schools in the United States, with the total number of elementary schools exceeding that figure by roughly fourfold, amounting to approximately 87,498. There were a total of 12,720 committed electric school buses in the United States as of June 2022.
This amounts to about 2-3% of the total school bus fleet in the country. Forty new school districts have committed to incorporating electric school buses into their fleets, bringing the total to 455. This is a 76% increase from the summer of 2022, but it is still a small portion of the total number of districts.
As one of the most important modes of transportation in the United States, the government has announced several plans to increase the demand for electric school buses. For instance, in September 2022, in response to overwhelming demand, the US Environmental Protection Agency (EPA) announced that it is nearly doubling the amount of money available to states to purchase electric school buses. In May, the EPA made USD 500 million available for clean buses, but that amount has now been increased to USD 965 million for districts across the country.
There are 38 states with electric school buses, with the majority of buses belonging to districts or entities on the coasts and in the suburbs. California continues to lead the way in electric school bus adoption, with nearly 1,400 committed electric buses across the state, 41% of which have been delivered or are in service. This is more than four times the number of buses in the next largest state. Following California, Virginia gained the most commitments since March 2022, with 58 electric school bus commitments, largely due to funds from the Volkswagen Mitigation Trust.
Many regional manufacturers are working with technology companies to develop new and innovative products, driving the competition and market. For instance, in September 2022, California's Modesto City Schools ordered 30 Blue Bird All-American Type D electric school buses. The deal, Blue Bird's single largest order of electric school buses from a school district to date, allows the district to convert roughly 50% of its diesel-powered bus fleet to electric.
