Transit Bus Market Size - By Fuel, By Seating Capacity, By Application Analysis, Share, Growth Forecast, 2025 – 2034

Transit Bus Market Size

The global transit bus market size was valued at USD 488.7 billion in 2024 and is projected to grow at a CAGR of 8.3% between 2025 and 2034. Urbanization and rising population density are transforming public transportation infrastructure globally. Cities are prioritizing sustainable and efficient transit solutions to address traffic congestion and enhance mobility. The increasing demand for cost-effective and accessible transportation is driving transit agencies to modernize bus networks.
 

For instance, according to the UN Department of Economic and Social Affairs, as of May 2024, 55% of the global population resides in urban areas, with this share projected to increase to 68% by 2050. Urbanization is expected to drive an additional 2.5 billion people into urban areas by 2050. Key investments are being directed toward advanced routing technologies, real-time tracking systems, and integrated public transit solutions. Governments are positioning buses as critical assets for fostering economic growth, promoting social inclusion, and achieving carbon emission reduction targets in urban areas.
 

Strict global environmental regulations are accelerating the shift toward zero-emission vehicle technologies in the transit sector. Governments are enforcing ambitious carbon reduction goals, mandating the adoption of electric and hydrogen-powered buses. Financial incentives, tax benefits, and grants are expediting the deployment of green transportation solutions. The push for sustainable mobility is underpinned by climate change mitigation efforts, the need to improve urban air quality, and the goal of reducing reliance on fossil fuels. These regulatory frameworks are creating strong business opportunities for adopting cleaner transit bus technologies.
 

Transit Bus Market Trends

Transit bus manufacturers are adopting modular designs and Bus Rapid Transit (BRT) models to enhance flexibility and customization. Standardized platforms enable efficient component replacement, scalability, and alignment with technological advancements, reducing maintenance costs and supporting sustainable lifecycle management. The ability to retrofit fleets and create purpose-built configurations is emerging as a key competitive advantage.
 

For instance, in March 2024, Volvo Buses expanded its electromobility portfolio with the Volvo BZR Electric, a versatile platform for city, intercity, and commuter operations. Designed for efficiency and sustainability, it offers high-floor or low-entry designs, two- or three-axle configurations, and single or dual motor drivetrains. Its modular energy storage system allows customizable battery setups to meet diverse operational needs.
 

The adoption of electric and advanced transit bus technologies necessitates significant upfront capital investment. The acquisition of electric buses, charging infrastructure, and related technologies entails considerably higher initial costs compared to traditional diesel buses. Transit agencies face challenges such as constrained budgets, financial limitations, and complex procurement frameworks. Balancing the potential for long-term operational cost savings against substantial initial expenditures remains a critical issue. Overcoming barriers such as securing adequate funding, mitigating financial risks, and establishing economically viable adoption models is essential for growth in the market.
 

Transit Bus Market Analysis

Based on the fuel, the market is segmented into diesel, CNG, electric and others. In 2024, the diesel segment accounted for over 51% of the market share and is expected to exceed USD 490 billion by 2034. The diesel transit bus market is evolving with advanced emissions control technologies. Manufacturers are incorporating selective catalytic reduction (SCR), diesel particulate filters (DPF), and exhaust gas recirculation (EGR) systems to meet stringent Euro VI and EPA 2010 standards. These technologies significantly reduce nitrogen oxide (NOx) and particulate matter emissions, enabling diesel buses to align with environmental regulations.
 

Hybrid diesel-electric powertrains are gaining traction as a transitional solution between conventional diesel and full electrification. By combining diesel engines with electric motor components, these systems improve fuel efficiency, reduce costs, and lower emissions. Transit agencies are adopting this approach to leverage existing diesel infrastructure while progressing toward electrification, benefiting from features like regenerative braking, battery storage, and optimized power management.
 

Based on the seating capacity, the transit bus market is divided into below 40 seats, 40-70 seats, and above 70 seats. By 2034, the 40-70 seats segment is expected to exceed USD 560 billion due to several key factors. The 40-70 seat transit bus segment is undergoing significant advancements with the adoption of electric powertrain technologies. Manufacturers are focusing on high-capacity battery systems optimized for urban transit, enhancing range, charging efficiency, and cost-effectiveness.
 

Innovations in lithium-ion and solid-state batteries are driving longer operational cycles, faster charging, and higher energy density. Transit agencies are prioritizing electric buses to comply with environmental regulations, reduce emissions, and benefit from government incentives. This shift is supported by improved battery performance, lower production costs, and expanded electric mobility infrastructure.
 

Manufacturers are leveraging modular design architectures to offer customizable solutions for diverse urban transit needs. These platforms enable quick adjustments for passenger requirements, accessibility, and operational constraints while simplifying maintenance and fleet management. Standardized chassis and body structures allow efficient adaptation for varying routes, capacities, and specialized services.
 

China transit bus market accounted for over 55% of the revenue share in 2024, driven by stringent government policies to reduce emissions and improve urban air quality. Substantial subsidies and incentives support the transition to electric vehicles (EVs), with cities like Beijing, Shanghai, and Shenzhen relying heavily on electric buses for public transport. Leading manufacturers such as BYD and Yutong are advancing China's goal of a fully electric public transport fleet, aligning with its carbon reduction and sustainability objectives.
 

European governments are accelerating the shift to zero-emission public transport through subsidies, tax breaks, and grants. Initiatives like the EU Green Deal and Fit for 55 are shaping policies in countries such as Germany, France, and the UK, driving the adoption of electric and hydrogen buses. Manufacturers like Volvo and Daimler are expanding their electric bus offerings to meet regional sustainability goals and reduce urban emissions.
 

North America, led by the U.S. and Canada, is rapidly transitioning to electric public transit buses, supported by federal and state programs like the U.S. Low-No Program. Cities such as Los Angeles and New York are integrating electric buses to meet sustainability targets. Manufacturers, including NFI Group and Volvo, are delivering electric buses tailored to North American requirements, focusing on extended range and performance in harsh climates.
 

Transit Bus Market Share

BYD, Yutong and Volvo collectively held a substantial market share of over 30% in the transit bus industry in 2024. BYD has established itself as a global leader in the electric bus market, leveraging China's strong support for green public transport. The company is expanding its electric bus portfolio in China and key international markets, including the U.S., Europe, and Latin America.
 

BYD focuses on developing buses with extended ranges, faster charging, and advanced features, targeting urban and intercity transit. Strategic partnerships with governments and transit authorities, along with significant investments in proprietary battery technology, enable BYD to secure large contracts and maintain a competitive edge.
 

Yutong is expanding globally into Europe, Asia, and Africa. The company uses advanced manufacturing and competitive pricing to secure contracts in emerging markets like the Middle East and South America. In Europe, Yutong is strengthening its presence in the electric bus segment by offering eco-friendly products that meet stringent EU regulations.
 

Volvo prioritizes electrification in its transit bus strategy, aligning with global and European zero-emission mandates. Its electric buses are widely adopted in cities like London and Gothenburg, driven by the EU's green initiatives. Volvo also offers hybrid solutions for clients transitioning to fully electric fleets, broadening its product range and supporting gradual adoption of sustainable transport.
 

Transit Bus Market Companies

Major players operating in the transit bus industry are:

• Ashok Leyland
• BYD
• Daimler
• MAN
• NFI Group
• Scania
• Tata Motors
• VDL Bus & Coach
• Volvo
• Yutong
   

Transit Bus Industry News

• In November 2024, Daimler Buses introduced the Mercedes-Benz eIntouro, its first battery-electric inter-city bus, as a near-series prototype. This launch marks the electrification of local public transport connecting urban and rural areas. With a range of up to 500 kilometers, the eIntouro is designed for longer distances and higher speeds, such as on country roads. It features LFP (lithium iron phosphate) batteries, shared with the Mercedes-Benz eActros 600 long-haul trucks, aligning with Daimler Buses’ shared parts strategy with parent company Daimler Truck.
   
• In October 2024, NFI Group Inc. (NFI), a leading bus and coach manufacturer specializing in electric mobility, announced plans to expand its subsidiary New Flyer Industries Canada ULC’s Winnipeg manufacturing operations. The initiative will enable full production of heavy-duty transit buses in Canada and increase zero-emission bus offerings. The project includes repurposing existing facilities and leasing a new finishing site, aiming to enhance production capacity by up to 240 units annually by 2027.
   

The transit bus market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($ Mn/Bn), and shipment (units) from 2021 to 2034, for the following segments:

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Market, By Fuel

• Diesel
• Compressed Natural Gas (CNG)
• Electric
  • Battery Electric Vehicle
  • Fuel Cell Electric Vehicle
  • Hybrid Electric Vehicle

Market, By Seating Capacity

• Below 40 seats
  • Urban transit
  • Suburban transit
  • Intercity
  • Others 
• 40-70 seats
  • Urban transit
  • Suburban transit
  • Intercity
  • Others
• Above 70 seats
  • Urban transit
  • Suburban transit
  • Intercity
  • Others

Market, By Application

• Urban transit
• Suburban transit
• Intercity
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Southeast Asia
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • UAE
  • Saudi Arabia
  • South Africa