The demand for battery electric buses has skyrocketed in recent years. The number of electric buses delivered in Europe and the US increased by 75% and 83% respectively in 2018 compared to the previous year. Driven by the demand for cleaner, more efficient public transportation, electric buses are becoming a symbol of environmental change with local and national governments often using them as a political statement for their environmental policies.
Whilst electric buses are gaining momentum around the world, there’s one country where electric buses have become the norm. In 2018, China accounted for 98% of electric buses delivered. Shenzhen, China’s Silicon Valley for hardware, recently announced that its entire fleet of more than 16,000 buses had all been replaced with electric models.
Although the vast majority of electric buses are concentrated in China, it’s important to note how geographic differences have played a significant role in shaping which battery chemistries are used.
What’s Driving the Demand for LFP batteries in China’s Electric Buses?
Chinese electric buses primarily use lithium-iron-phosphate (LFP) batteries because they are cheaper to manufacturer compared with like-for-like ternary compound lithium-ion (NMC/NCA) batteries (see figure 1). Whilst cost sensitivity has been one of the key factors in the decision to use LFP batteries for electric buses in China, there are several other reasons for its dominance in the region.
The population density of China’s major cities such as Shenzhen, Shanghai and Beijing mean that buses tend to operate shorter duty cycles making battery density less of an issue compared to the US with its sparsely populated cities. Congestion plagues many Chinese cities with average speeds often no greater than 10mph. While diesel buses are more efficient during long periods of high-speed driving, electric buses perform best during stop-start duty cycles where the benefits of regenerative breaking are highest.
Furthermore, there’s significant intellectual property rights associated with the production of high-density NMC batteries, primarily from Japanese and Korean battery manufacturers, and the use of LFP batteries avoids any risk of litigation whilst simultaneously promoting domestic battery suppliers over foreign competitors such as LG Chem and Samsung. In 2018, CATL and BYD together sold 78% of electric bus lithium-ion batteries in China; both of which favour LFP batteries for electric buses.
China’s new energy vehicle subsidy programme, which provides supply and demand – side financial support based primarily on the energy density of the battery, successfully increased the share of high-nickel content NMC batteries within the passenger vehicle segment (although there’s been a reversal of this trend since the subsidies began phasing out earlier this year). The Chinese electric bus market, on the other hand, remains dominated by LFP batteries without any significant transition to high energy-dense NMC batteries because the threshold energy density required to receive government subsidies for electric buses is only 135Wh/kg – compared with 160Wh/kg for passenger vehicles – which means that electric buses using LFP batteries are still eligible for government subsidies.
The Bigger the Better: Europe and North America’s Demand for Greater Battery Density
With its sparsely populated towns and cities, US transit authorities tend to favour electric buses with larger battery packs. New Flyer, for example, uses an 818kWh battery pack for its articulated electric buses, nearly triple that of European-based VDL Bus & Coach which uses a 288kWh battery pack for its roughly equivalent sized articulated buses. With such large battery packs, energy density becomes a critical factor which is why New Flyer and Proterra, the two largest US electric bus manufacturers, use NMC batteries.
On the contrary, European cities tend to have a higher population density and bus routes are often smaller with more frequent stops and starts, maximising energy recuperation. However, despite the shorter duty-cycles, there’s a growing trend towards the use of depot only charging strategies, as opposed to opportunity-based charging strategies, which necessitates larger battery packs (See Figure 3 & 4). Solaris announced earlier this year that it will be increasing the battery capacity of its articulated buses from 300kWh to 550kWh using its new High Energy-Plus batteries, sourced from a new unnamed battery supplier, which are designed to ‘travel longer distances without the need to recharge’. MAN Truck and Bus’s electric Lion City E bus will have a battery capacity of 480kWh for its 12m version and 640kWh for its articulated bus which is a far greater capacity than similar models on the market.
As the average battery size for electric buses increases in Europe, the need for batteries with higher energy density becomes critical to minimise the weight of the battery packs which becomes a significant design constraint as the battery capacity increases. That being said, as BYD, Yutong and other Chinese brands continue to penetrate the European and North American electric bus market, the share of LFP batteries will increase.
While there’s a clear dichotomy between the battery chemistry used in Chinese electric buses and those manufactured elsewhere, the overall market is highly skewed in favour of LFP cathodes because of the sheer volume of the Chinese market relative to the rest of the world. Although electric buses are gaining popularity in Europe and North America, it’s clear that LFP will remain the dominant cathode material for electric buses for the near future at least.