electric bus, electric vehicles, evs, public transportation, ark, ark investment management, investment management, investing, ETFs, arkq, arkindu, ark industrial innovation,

Electric Bus Sales Could Soar

While electric cars seem to be generating quite a bit of excitement these days, investors may be surprised to learn that the transition to electric buses is happening even faster. Estimates call for plug-in hybrid and electric (H&E) bus sales to be more than 42,000 by 2020, achieving 15.4% market penetration, much higher than the anticipated 3.5% H&E car penetration. Purely electric buses are projected to comprise 5.7% of the 2020 bus market.1

Through the end of 2013, Chinese electric bus company BYD BYDDF sold more than 1,000 electric buses. The company also already has future orders in place for more than 5,000 units, valued at $1.6 billion USD. To put this into perspective, global electric bus sales totaled 5,000 units in 2012.

In contrast, 206,000 plug-in hybrid and electric cars were sold in 2013, up from 113,000 in 2012 accounting for 0.25% of the global market.2 According to estimates, 3.8 million plug-in hybrid and electric cars will be sold in 2020, reaching 3.5% of the market.3

Unlike most consumers, bus companies take into account the total cost of ownership over the lifetime of a vehicle, and on that basis many of them have begun to favor electric buses. Warren Buffett certainly has bought into this trend. He owns a 10% stake in $38 billion BYD.

BYD recently won contracts to build electric buses for transit agencies in Los Angeles and Long Beach, California, over U.S. competitors. The busses run on 324 kWh iron-phosphate batteries and already are being sold in South America, Europe and Asia.

The range of BYD’s 18-ton bus is roughly 155 miles, which is remarkable for its size. While a BYD bus weighs as much as nine Tesla TSLA vehicles, its range is only 40% less than the 265-miles of the Model S.

  1. Future electric bus sales through 2020.
  2. Data for electric vehicle sales historic and also 2013.
  3. Future electric vehicles sales through 2020.

The information provided is for informational purposes only. It does not constitute any form of advice or recommendation to buy or sell any securities mentioned. It is intended only to provide observations and views of the author(s) at the time of writing, both of which are subject to change at any time without prior notice. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on ARK's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Past performance is no guarantee of future results. Equities may decline in value due to both real and perceived general market, economic, and industry conditions. For a list of all purchases and sales made by ARK for client accounts during the past year that could be considered by the SEC as recommendations, click here. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. For full disclosures, click here.