As China’s electric bus market matures, exports hold the key to future profitability for Yutong, Foton and their peers in competing with European electric-bus producers, but high import tariffs could undermine their ambitions. Kent Chang, CEO of Asia-Pacific at Yutong Bus, China’s and the world’s largest bus and coaches maker, has been busy courting new customers, the South China Morning Post reports. After a trade show in Chile in August and Australia in September, he is next bound for the Philippines and Thailand. He is not alone. At the biennial National Coach and Bus show in Brisbane last month, Chinese peers like King Long United Automotive Industry and Foton Motor Group were also looking for customers. BYD, the world’s largest electric-vehicle maker, also presented its fleet. Together, their prominence shows China’s leadership in the electrification of public transport. In one decade, China has replaced 80% of its public buses with a fleet powered by electricity and hydrogen fuel cells. The nation’s biggest manufacturers are now seeking to replicate the success globally, including in some of the more hostile markets. It will not be a stroll, amid growing trade barriers and protectionist measures in North America and Europe.
“Australia is important for us not only because it is a sizable market for new energy vehicles, but also a showcase for the entire Asia-Pacific region,” Yutong's Chang said at the Brisbane show, after unveiling a new electric bus technology platform that boosts driving ranges, cuts operating costs and enhances safety. As China’s domestic market matures, overseas markets are key to future profitability. At stake are multibillion-dollar programs by various governments to phase out diesel- and gas-powered buses. Rivals like Volvo Group and Scania of Sweden are also eyeing these contracts. Australia's New South Wales government is seeking to replace its 8,000-odd diesel and natural gas-powered buses in stages by 2047. In Victoria, the state government requires all new public transport buses acquired from 2024 to be zero-emissions ones. Queensland declared the same policy in August last year. “Business is looking good,” said Greg Abel, Sales Manager for buses at Foton Mobility Group, the Australian distributor of new energy trucks and buses for Beijing-based Foton Motor. “Australia’s zero-emission commercial vehicles market is in the early stages of development and is poised to see some changes shortly. We are just waiting for the purchase decisions to be made by the various state governments,” he said.
Yutong, the market leader based in Zhengzhou, Henan province, has sold 190,000 new-energy commercial vehicles in 100 countries including France, UK, Denmark, Australia, Saudi Arabia and Ethiopia, according to its website. Including fossil-fueled buses, it has gained a 10% share of the global market, on top of a commanding 36% share at home. The path to North American and European markets is certain to be rocky. The U.S. and Canada last month slapped a 100% tariff on Chinese-made electric vehicles, including buses, to counter state subsidies and level the playing field. In the EU, electric buses have narrowly escaped tariffs of as high as 45%. The levy adds to the “Buy America” provision that requires that metals and goods bought for a transit project with public funds be produced domestically, according to Heather Thompson, CEO of Institute for Transportation and Development Policy (ITDP) in New York, a non-government organization that promotes sustainable and equitable transport. “The verdict is still out on whether China’s industry dominance can be sustained,” she said. “Competition is growing in key regions like the U.S. and the EU, bolstered by politics favoring protectionist measures in the domestic market that limit international trade of vehicles and components.” To overcome the hurdle, Chinese exporters will need to establish production facilities there, she added. For example, BYD has already set up an operation in North America since 2013 to make buses, hiring more than 1,000 workers for its manufacturing facilities in California and Ontario, Canada.
Chinese manufacturers started electric bus development more than a decade ago, building their leadership with cost advantage in a huge domestic market. Favorable state policies also helped spur the development of battery and hydrogen fuel cell buses, while generous subsidies also aided sales. There were 554,400 new energy public buses in China at the end of 2023, accounting for 81% of the entire bus fleet, according to data published by the Ministry of Transport. The number has risen 15-fold from 37,000 in 2014, when they made up just 7% of the total fleet.
After reaching 90% in 2020, China’s share of global electric bus sales shrunk to 60% in 2023 as local sales growth cooled and overseas markets grew, according to the International Energy Agency (IEA). The fall in demand could be a consequence of China’s early success, it said. “Around 65% of China’s electric bus stock was deployed before 2019,” the IEA said. “It was also linked to the ending of China’s purchase subsidies for all-battery and hybrid electric buses at the end of 2022.” The subsidies have since been replaced by an “old-for-new” incentive. From August, fleet owners stand to gain an CNY80,000 rebate for each new electric bus acquired, if they retire one that is at least eight years old. Some 140,000 buses, or a quarter of the existing stock on the road, meet that criteria, but the future growth potential lies outside the country, the South China Morning Post reports.
