As the rate of urbanization increases year-over-year globally, cities are increasingly becoming crowded, creating pressure for cities’ infrastructure. Urban traffic congestion is leading to further air degradation, creating critical issues for governments. This is because environmental concerns will necessitate huge investments in order to improve the infrastructure in cities.
Countries’ dependency on fuel imports combined with volatile fuel prices and increasing reliance on conventional fuel will make funding these projects a huge challenge, particularly with the current and foreseeable global economic outlook.
Issues relating to urbanization and public transit will become key priorities to solve for governments and businesses in order to sustain meaningful and all-encompassing growth. The transportation industry, especially the transit bus industry, will have to adapt to newer powertrain systems and other advanced technologies - such as connectivity, hub-and-spoke multi-modal urban mobility, among others - to enable sustainable and economical passenger mobility.
Transit bus industries globally will experience noticeable growth as transit buses will be increasingly viewed as a cost-effective, easy way to meet urban mobility challenges. Between 2012 and 2020, the global heavy duty (HD) transit bus industry is expected to grow at a compound annual growth rate (CAGR) of 6.4 percent and account for 278,000 unit shipments by the end of that period.
If there is an increase in connectivity and frequency of transit buses while still running on conventional fuels, such as diesel and gasoline, the transit bus ecosystem will become more unsustainable, as it will be exposed to fuel price volatility. Any increase in ticket prices related to the increase in fuel costs will likely negatively affect the amount of people using transit buses.
Advanced powertrains, such as hybrid and electric (H&E) drives for transit buses, have already experienced rising proliferation as cities all over the world are starting to adopt these technologies to reduce emissions and fuel consumption. These green powertrain systems promise to improve fuel efficiency, helping to compensate for expected increases in fuel price and in ridership cost.
Though transit bus systems are an integral part of society in BRIC countries and other emerging economies, the success of transit bus systems in North America and Europe depends on change of public perception. Making transit buses appeal as an environmentally friendly, convenient and economical proposition can help bring in more ridership and can encourage a switch from personal to public transport.
The recent increase in growth of bus rapid transit systems in many American and Canadian cities shows that hub-and-spoke mass transit systems are being developed to solve urban mobility and in this scheme hybrid/electric buses will play an integral role.
A Global Phenomenon
Hybridization and electrification of powertrains is poised to become a global phenomenon in transit buses by 2020 driven by cash incentives, tax subsidiaries, stringent emission laws, regulations mandating green powertrains in transit buses for urban use and overall financial aid for green technology development.
Frost & Sullivan’s latest research focused on the global HD transit bus market indicates that sales of H&E buses will grow at a CAGR of 20.6 percent by 2020. It is estimated that global penetration of hybrid buses will reach 9.7 percent by 2020 and 5.7 percent for electric buses, reaching combined H&E transit bus unit shipments of close to 42,000 units.
China will lead global sales growth for H&E buses, accounting for every other new energy bus sold globally by 2020. Latin America is expected to emerge as the second biggest market for H&E transit buses and is likely to grow at 56.4 percent CAGR between 2012 and 2020.