Global Plug-in Hybrid Electric bus Market Overview, 2029

The global plug-in hybrid electric bus (PHEB) market is experiencing robust growth as governments and cities prioritize sustainable urban mobility. PHEBs, which combine internal combustion engines with electric propulsion systems, provide a pragmatic solution for reducing greenhouse gas emissions and urban air pollution. Unlike traditional diesel-powered buses, PHEBs offer significantly lower fuel consumption and can operate in pure electric mode, making them ideal for reducing emissions on urban routes. Environmental degradation and climate change have heightened the demand for cleaner transportation solutions. Governments worldwide are adopting stricter emission regulations, creating a favorable market for PHEBs. These buses are not only eco-friendly but also economically beneficial, offering lower operational costs in the long run. They enhance air quality and promote sustainability in urban areas, making them an attractive option for policymakers and transit authorities. PHEBs provide flexibility, allowing transit operators to adapt to different route requirements while reducing dependency on fossil fuels. Their ability to switch between electric and conventional fuel modes makes them particularly useful for urban transit systems with stop-and-go traffic patterns. As cities worldwide grow and urban transportation needs intensify, the adoption of PHEBs is set to expand significantly, contributing to cleaner and greener cities globally.

According to the research report, “Global Plug-in Hybrid Electric Bus Market Outlook, 2029” published by Bonafide Research, the market is anticipated to grow at more than 12.10% CAGR from 2024 to 2029. This growth is driven by rapid urbanization, government incentives, and technological advancements in battery systems. Urbanization is increasing the need for efficient public transportation systems, and governments are actively introducing subsidies and incentives to encourage the adoption of PHEBs. Advancements in battery technology have made these buses more reliable and cost-effective, further boosting their adoption. The market’s growth is also supported by strong governmental policies aimed at reducing carbon emissions and transitioning to cleaner energy sources. Europe and Asia-Pacific are key players in this market. Europe benefits from stringent environmental regulations and widespread electrification initiatives, while Asia-Pacific, led by countries like China and Japan, has witnessed significant investments in electric mobility. These regions’ focus on clean energy and sustainable transportation solutions ensures a positive market outlook. The combination of public awareness, policy support, and technological innovation is expected to drive substantial growth in the PHEB market.

Market Dynamics

Market Drivers



Stringent Emission Standards and Environmental Policies: Governments worldwide are implementing stringent emission regulations to combat urban air pollution and climate change. Plug-in hybrid electric buses offer a practical solution for municipalities to comply with these policies by reducing emissions from public transportation.

Incentives and Subsidies for Electric Mobility: Subsidies, tax benefits, and other incentives provided by governments and municipalities are significantly reducing the upfront costs of PHEBs. This financial support is encouraging public transportation agencies to transition to hybrid and electric fleets.

Market Challenges

High Initial Investment Costs: The cost of plug-in hybrid electric buses, including advanced battery systems and charging infrastructure, remains a major barrier for widespread adoption. Although operating costs are lower over the long term, the high upfront expenses deter some buyers.

Limited Charging Infrastructure: The absence of an extensive and reliable charging network in many regions poses a significant challenge for the adoption of PHEBs. Efficient operations demand investments in infrastructure, which are still inadequate in several markets.

Market Trends

Advancements in Battery Technology: Innovations in battery technologies, such as solid-state batteries and improved energy densities, are enhancing the range, reliability, and affordability of plug-in hybrid electric buses. These advancements are crucial for accelerating market penetration.

Integration of Smart and Connected Technologies: Plug-in hybrid electric buses are increasingly equipped with IoT and telematics systems, enabling real-time monitoring, predictive maintenance, and energy management. These technologies are enhancing operational efficiency and fleet management.

Segmentation Analysis

Plug-in Hybrid Electric Buses Are Chosen for Their Dual-Fuel Capability and Flexibility

Plug-in hybrid electric buses dominate the global market due to their ability to seamlessly switch between internal combustion engines and electric propulsion systems. This dual-fuel capability allows operators to optimize energy use, reducing overall fuel consumption and emissions. The flexibility of PHEBs makes them particularly effective in urban settings where stop-and-go traffic is common, allowing for maximum utilization of electric propulsion. Unlike fully electric buses, PHEBs do not require extensive charging infrastructure, making them a more practical choice for transit authorities globally. They also address concerns regarding range limitations by relying on conventional fuel as a backup. This versatility ensures continuous operations even in regions with underdeveloped charging networks, offering a cost-effective and reliable solution for public transportation. PHEBs also cater to the growing demand for eco-friendly transit solutions without compromising on operational efficiency. Their ability to operate in pure electric mode on urban routes not only reduces emissions but also lowers noise pollution, enhancing the overall urban experience. As technology continues to evolve, the efficiency and affordability of PHEBs are expected to improve, reinforcing their position as market leaders in sustainable public transport.


Lithium-Ion Batteries Lead Due to Their Superior Energy Density and Longevity

Lithium-ion batteries have emerged as the preferred energy storage solution for plug-in hybrid electric buses, thanks to their superior energy density, long lifespan, and quick charging capabilities. These attributes make lithium-ion batteries particularly well-suited for the demanding requirements of hybrid electric buses, where reliability and performance are paramount. High energy density allows lithium-ion batteries to store significant amounts of energy in a compact form, providing the extended range needed for hybrid applications. This ensures that PHEBs can operate efficiently on long routes without requiring frequent recharging, a critical factor for transit authorities aiming to maintain schedule reliability. Additionally, the durability of lithium-ion batteries minimizes maintenance requirements, reducing the total cost of ownership for operators. Continuous advancements in lithium-ion technology have addressed key concerns such as safety, cost, and environmental impact. Improved thermal stability and enhanced energy storage capacities have made these batteries more robust and efficient, while innovations in recycling processes are improving their environmental footprint. As economies of scale reduce production costs, lithium-ion batteries are becoming more accessible, further driving the adoption of PHEBs. Lithium-ion batteries not only power the evolution of PHEBs but also represent a critical component in the broader shift toward electric and hybrid mobility. Their ongoing development ensures that PHEBs remain a reliable and sustainable solution for urban transit systems.


Urban Transit Systems Dominate Due to Growing Demand for Eco-Friendly Public Transport

Urban transit systems represent the largest application segment for plug-in hybrid electric buses, driven by increasing investments in sustainable public transportation networks. As cities worldwide grapple with rising population densities and worsening air quality, the demand for clean and efficient mobility solutions has surged. PHEBs have emerged as a viable alternative to traditional diesel buses, offering significant environmental and operational benefits. Metropolitan areas, where congestion and pollution are most acute, benefit greatly from the adoption of PHEBs. These buses reduce greenhouse gas emissions and noise pollution, contributing to improved urban living conditions. Their ability to operate in electric mode during stop-and-go traffic makes them particularly effective in city environments, where traditional buses are less efficient. Governments are prioritizing clean urban mobility through policies and incentives aimed at modernizing public transit fleets. By incorporating PHEBs into their networks, transit authorities can achieve sustainability goals while lowering fuel and maintenance costs. Additionally, PHEBs’ reduced reliance on extensive charging infrastructure makes them a practical choice for cities transitioning toward fully electric fleets. As the focus on sustainable urban development intensifies, the role of PHEBs in urban transit systems is expected to expand, driving continued growth in this segment.



Regional Analysis

Asia-Pacific emerges as the dominant region in the PHEB market, supported by rapid urbanization, large-scale investments in public transport infrastructure, and favorable government policies


Asia-Pacific has established itself as the dominant region in the global plug-in hybrid electric bus market, thanks to rapid urbanization, substantial investments in public transport infrastructure, and supportive government policies. Countries like China, Japan, and South Korea are leading the charge in electrifying public transit fleets to reduce urban pollution and greenhouse gas emissions. China stands out as a global leader in electric mobility, accounting for a significant share of PHEB production and deployment. The Chinese government’s aggressive policies, including financial incentives and stringent emission standards, have driven widespread adoption of hybrid and electric buses across major cities. This commitment to clean urban mobility has positioned China as a key player in the global PHEB market. Japan and South Korea are also contributing to the region’s growth through innovative technologies and sustainable development initiatives. These countries have leveraged advancements in battery technology and hybrid systems to enhance the performance and reliability of PHEBs. Asia-Pacific’s strong focus on reducing pollution and achieving climate goals ensures continued investment in hybrid and electric mobility solutions. The region’s leadership in the PHEB market reflects its commitment to creating sustainable urban environments, paving the way for other regions to follow suit.


Key Developments

• In November 2024, Company A introduced a new range of plug-in hybrid buses featuring advanced telematics and improved battery performance.
• In September 2024, Company B partnered with a leading battery manufacturer to develop cost-effective energy storage solutions for hybrid buses.
• In July 2024, Company C expanded its production capacity in Europe to meet growing demand for plug-in hybrid electric buses.
• In April 2024, Company D launched a pilot project in urban areas to test smart charging solutions for hybrid bus fleets.

Considered in this report
* Historic year: 2018
* Base year: 2023
* Estimated year: 2024
* Forecast year: 2029

Aspects covered in this report
* Plug-in Hybrid Electric Bus Market with its value and forecast along with its segments
* Country-wise Plug-in Hybrid Electric Bus Market analysis
* Various drivers and challenges
* On-going trends and developments
* Top profiled companies
* Strategic recommendation



By Propulsion Type:
• Plug-in Hybrid Electric Buses
• Fully Electric Buses
• Diesel-Hybrid Buses


By Battery Type:
• Lithium-Ion Batteries
• Nickel-Metal Hydride Batteries
• Solid-State Batteries


By Application:
• Urban Transit Systems
• Intercity Transport
• Private and Corporate Fleets


The approach of the report:
This report consists of a combined approach of primary as well as secondary research. Initially, secondary research was used to get an understanding of the market and listing out the companies that are present in the market. The secondary research consists of third-party sources such as press releases, annual report of companies, analysing the government generated reports and databases. After gathering the data from secondary sources primary research was conducted by making telephonic interviews with the leading players about how the market is functioning and then conducted trade calls with dealers and distributors of the market. Post this we have started doing primary calls to consumers by equally segmenting consumers in regional aspects, tier aspects, age group, and gender. Once we have primary data with us we have started verifying the details obtained from secondary sources.

Intended audience
This report can be useful to industry consultants, manufacturers, suppliers, associations & organizations related to Global Plug-in Hybrid Electric Bus industry, government bodies and other stakeholders to align their market-centric strategies. In addition to marketing & presentations, it will also increase competitive knowledge about the industry.