Commercial Vehicles September 2021

A Real Bus Revolution? Challenges and Opportunities In The UK’s E-Bus Market

Alastair Hayfield
Alastair Hayfield

Alastair has over 15 years’ experience leading research activities in scaled, high-growth industrial and technology markets. As Senior Research Director of our Commercial Vehicles Division, he’s responsible for cutting-edge research on electric trucks and buses, autonomous trucks and off-highway electrification.

By Alastair Hayfield, Senior Research Director, Interact Analysis

This article first appeared in Sustainable Bus magazine – you can see it on their site here

Bus Back Better initiative pledges to introduce 4,000 new ZE buses to the country’s roads. Goal: net zero by 2050. PTOs are setting roadmaps for the transition, and UK industry is moving ahead.

The UK’s bus market is in poor shape. It has been in decline since 2010 when the UK government introduced a severe cut in bus funding by scaling back the Bus Service Operators Grant – a fuel subsidy which had been worth around £500m to the industry annually.

As indicated by the graph below, the subsequent downward trend in new bus and coach registrations was severe. During the first quarter of 2010 there were over 2,500 registrations, decreasing to little over 1,000 in the first quarter of 2021. The severe fall in the market was exacerbated during and after 2020 by COVID-19, and the subsequent combination of a fall in ticket sales and a lack of government support.

The UK bus and coach market from 2010-2021

Perhaps you would think that the picture would look a little better if we split the market by bus type? You would be wrong. The Society for Motor Manufacturers and Traders (SMMT) reports that single deck buses and coaches have suffered the most with double deckers and minibuses not far behind.

Funding in Europe

Bus funding models in many other European countries are far more comprehensive and effective. Sweden, Germany, and Denmark in particular are devoting significant funding to the electric bus market. According to data from Transport and Environment (T&E), Denmark leads the way, having the most zero-emission buses on European roads, 78% of which are electric. Luxembourg and the Netherlands are close runners up, with around 66% of their new bus registrations being zero emission vehicles. And the situation in Germany is similar, with the German government pumping €1.25 billion into electric buses between now and 2024.

While the UK bus market has taken a hammering from the COVID-19 pandemic, and while there is no sign yet of a clear recovery, the sheer flexibility of buses does theoretically mean that the sector could get back on its feet relatively quickly, and without too great a cost.

There is cause for hope, then, in the government’s recently announced Bus Back Better initiative, which will provide £3bn of new funding to improve the UK’s bus services and which pledges to introduce 4,000 new electric or hydrogen buses to the country’s roads. All this is part of the UK government’s wider aim of achieving net zero by 2050. And UK bus operators have invested over £1.3bn in cleaner buses over the past 5 years. Some government funding has already been forthcoming. For example, Northern Ireland-based bus manufacturer Wrightbus has been awarded £11.2m in government funding to support the development of hydrogen powered buses.

However, Bus Back Better has come in for some criticism. Although Prime Minister Boris Johnson says he wants to encourage people to use public transport by introducing daily fare caps and new flexible services, his policy has been accused of ‘lacking ambition’. And critics suggest that the strategy lacks the kind of guaranteed national funding that is needed to get the sector up and running again whilst also creating greener fleets. One Local Government Association transport spokesperson has stated that “The government should plug the £700m annual funding gap that local governments faced before the pandemic”.

Operators ahead of the game

The government has promised to end the sale of new diesel buses, but the deadline date is still in consultation. However, some UK bus operators are getting ahead of the game. First Bus has announced that they will not be buying any new diesel buses after 2022 and has committed to having a zero emission fleet by 2035. Similarly, Stagecoach has also announced that they are targeting a zero-emissions bus fleet by 2035. Meanwhile, a partnership between battery manufacturer BYD and bus manufacturer Alexander Dennis has supplied National Express with the first of 29 electric double decker buses, and Tom Stables, Managing Director at National Express, says “The National Express bus fleet will be zero emission by 2030”.

Manufacturing is way ahead

While UK manufacturing in general has been well known for its significant decline since the Thatcher era, when it comes to sustainable bus manufacturing there is actually a lot going on. Arrival – a UK manufacturer with a manufacturing strategy based around micro factories and mobile robots – is a particularly exciting example. The company has signed a deal with the UK’s First Group for their first road trial during the autumn of this year. This will be a litmus test: will UK bus companies want to work with a new vendor? Will Arrival even still be around in 10 years’ time?

On top of this, the partnership of BYD with UK manufacturer Alexander Dennis has taken the UK’s biggest ever order for electric buses – and is delivering 195 vehicles to Transport for London (TfL). This order has been placed in pursuit of the primary aim of satisfying London mayor Sadiq Khan’s plan for all TfL buses to operate with zero emissions by 2037.

Furthermore, since the UK bus manufacturer Wrightbus was saved from administration by the UK’s Jo Bamford (of the JCB dynasty), the company has launched the world’s first hydrogen double decker. Overall, it seems that UK manufacturers are largely beyond criticism: these companies are working tirelessly to make the UK’s transport services both greener and cleaner with the collective aim of achieving net-zero by 2050 at the latest.

To continue the conversation about electric bus markets, both in the UK and globally, get in touch with Alastair directly:




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