Pike suggests that North America will experience a rebound in a few years, as the economy stabilizes along with public transit funding levels. Sales of electric drive buses in Western Europe will experience steady growth (around a 20% CAGR), as the hybrid market begins to take off and there is continued interest in building the electric and fuel cell bus markets, according to Pike.

The Latin American market will be driven largely by uptake in Brazil, but other countries will also spur adoption, notably Uruguay which recently indicated it would purchase 500 battery electric buses. The Africa/Middle East countries will see very little uptake due to the high cost of electric buses and infrastructure, the report finds.

In terms of the status of the three electric-drive technologies, Pike notes that:

• Hybrid buses are a mature technology, and are generally best suited for lower speed, stop-and-go driving. A parallel hybrid system is more suited to duty cycles where there is both stop and-go and higher speed or steady speed driving. Current hybrid buses can cost around $200,000 more than a comparable diesel bus, depending on the bus specifications.

  North America is the leading market for this technology, with hybrids capturing 30% to 40% of annual transit bus sales. Europe is behind on hybrid bus deployments, although stimulus funding in the UK has spurred a 50% increase in the sales of hybrids over the last few years. Germany has a hybrid bus demonstration program, although results have been mixed.

  Annual sales of hybrid buses in China surpassed that of North America in 2011, reaching almost 1,700 units.

• Battery electric buses are still in development and demonstration for most parts of the world, including the United States and Europe. The exception to this is China, which has been undertaking a major initiative to deploy electric vehicles of all types through its “Ten Cities, Thousand Vehicles Program.” Since 2009, hundreds of battery buses have been deployed through this effort, and China has become a leading developer of battery electric buses, with more than 10 electric bus original equipment manufacturers (OEMs).

• Fuel cell buses are currently in a pre-commercial phase, although there are buses being deployed in regular transit operations and transit fuel cells being offered with conventional warranties. Most fuel cell development in the transit sector has focused on the full-size 40-foot buses, with the fuel cell providing primary propulsion. This requires a high power fuel cell—typically around 125 kW to 150 kW.

  key markets will be the United States, where California’s Zero Emission Bus regulation is spurring development and Europe, where the European Union is funding a 28 bus deployment. China and Japan will also see development and deployment activity, although China is not pushing as aggressively in fuel cell as with battery electric buses.

Fundamentally, all of these buses require either government emissions or fuel economy policy that essentially requires a shift from conventional diesel buses or government subsidies and grants to offset the price premium. The biggest challenge for electric drive technologies has been the cost premium over a conventional diesel bus or a CNG bus.

...The price premium is even more considerable for fuel cells and battery electric buses. In addition, fuel cell and battery electric buses are still in pre-commercial or very early commercial production and have some operational limitations arising from the respective technologies

—“Electric Drive Buses”

Li-ion batteries. Pike also forecasts that global demand for Li-ion batteries in electric drive buses will be more than 162,000 kWh in 2012. Pike Research expects that demand to grow to more than 1.3 million kWh by 2018, a CAGR of 42%.

The hybrid bus segment is expected to provide the greatest demand this year, with around 91,000 kWh needed to fulfill hybrid bus orders. This does not correspond directly to hybrid bus growth, Pike notes, because NiMH and ultracapacitors continue to take a significant part of the energy storage market share for hybrids.

By 2018, it is perhaps not surprising that battery electric buses will drive the most demand for Li-ion batteries. Since battery buses are expected to be almost 100% powered by lithium ion, and they require much larger batteries than hybrids, this market offers the greatest growth potential. It is expected that Li-ion battery capacity for battery buses will grow from 69,472 kWh in 2012 to over 1 million kWh in 2018, a 57% CAGR.

Finally, fuel cell buses will drive demand for Li-ion batteries as well but to a much lower degree. Pike Research estimates that they will require around 1,600 kWh in 2012, but will grow to 22,240 kWh by 2018.

—“Electric Drive Buses”