The transportation industry is going electric as part of the broader push to cut emissions and go green. While much of the focus is on electric vehicle investments, there is an opportunity to replace the world's massive fleet of more than 3 million buses with zero-emission alternatives. In Europe and China, there are government mandates for 100% zero-emission bus fleets as soon as 2025.
While there is a lot of potential business for companies that make electric buses, there's also considerable risk. For one, the engineering of electric propulsion becomes more complicated on larger vehicles because heavier electric vehicle batteries are required.
There is also the inevitable red tape associated with dealing with government customers. Any delay can be an existential threat to young companies relying on government contracts for revenue.
There are many options for investors interested in buying into the potential. Some are stand-alone start-ups focused on electric buses, while other bus businesses are parts of bigger manufacturers, offering less risk but potentially less upside if electric buses do take off.
Top 5
5 best electric bus stocks for 2025
| Company | Market Cap | Description |
|---|---|---|
| Volvo Group (OTC:VLVLY) | $53.1 B | The industrial powerhouse has turned to electric powertrains ahead of government mandates. |
| Volkswagen (OTC:VWAGY) | $47.0 B | Electric minibuses are a big part of this automaker's vision to be 20% electric by 2025. |
| Blue Bird (NASDAQ:BLBD) | $1.3 B | The U.S. school bus mainstay is increasingly turning its attention toward electric vehicles. |
| Lion Electric (NYSE:LEV) | $85.8 M | The company is a Canadian public transit and school bus manufacturer. |
| GreenPower Motor (NASDAQ:GP) | $26.6 M | This is a Canadian manufacturer of zero-emission buses and heavy-duty vehicles. |
1. Volvo
1. Volvo
This is the industrial Volvo (VLVL.Y 0.15%), a maker of trucks, buses, and construction equipment -- not to be confused with the separate vehicle maker of the same name. Volvo has long been one of the leading providers of heavy vehicles powered by diesel engines. However, the company is changing its product lineup in response to mandates from European government customers.
Volvo's 7900 series electric bus is a mainstay in many European cities. Its popularity stems from its variety of charging options, ranging from overhead powerlines to overnight recharging. Over time, the company has built strong relationships with a wide range of municipalities, giving it a clear advantage in the race to sell next-generation vehicles.
2. Volkswagen
2. Volkswagen
Volkswagen (VWAGY 1.3%) is the world's largest automobile manufacturer. It also makes a wide range of commercial vehicles, including small to mid-sized buses. The company, in part after being caught up last decade in a scandal involving its emissions reporting, has set a target of 20% of all vehicle sales being electric cars by 2025.
The company's ID Buzz minibus is a big part of that push. Modeled on Volkswagen's iconic Beetle design, the Buzz is part of a range of electric vehicles designed to cover a wide swath of the individual and heavy-duty transportation market.
Volkswagen is a massive company with vast resources to put to work on electrification, giving it a potential leg up against newcomers. It is also investing in electric infrastructure, including battery producers.
3. Blue Bird
3. Blue Bird
As the first name in school buses in the United States, Blue Bird (BLBD -1.02%) is an almost century-old company that makes most of the yellow buses that transport kids to school every day. But Blue Bird is not resting on its history.
The company was the first to manufacture electric school buses, with its first product rolling off the line in 1994. Today, Blue Bird offers 77-seat and 84-seat electric options. It also has a massive dealer network and an established financing arm to help it expand the business.
The case for Blue Bird electric buses is pretty straightforward. This company already has deep connections with the thousands of counties and school districts that have been buying its school buses for generations. As these schools move toward buses with electric powertrains, it is only natural that Blue Bird will be near the top of the list of vendors they call.
4. Lion Electric
4. Lion Electric
Lion Electric is a Canadian manufacturer of zero-emission vehicles, and it is putting a heavy emphasis on the school bus market. The company offers customers a turnkey solution, including buses, parts and maintenance, driver training, and advice on building the required charging infrastructure.
This is a massive potential market. In the U.S. alone, more than 480,000 school buses transport an estimated 26 million students daily. But given the limitations of local government budgets, it could take years for that potential to translate into sales. Lion is steadily growing its presence in the U.S., including offices in California and Illinois, in hopes of building the connections needed to boost its sales.
5. GreenPower
5. GreenPower
This company got started in 2010 and launched its first electric bus in 2014. GreenPower (GP 2.2%) is developing a wide range of cargo and passenger vehicles, including cargo vans, shuttles, school buses, and even double-decker commuter transports. It also partners with Workhorse Group (WKHS 1.79%) to help expand its distribution in the U.S. and as a supplier of electric chassis.
This is still a small company, and it comes with significant risks. But it could be an intriguing option for investors who can tolerate volatility and are interested in getting in on the ground floor of an emerging technology.
Right for you?
Are electric bus stocks right for your portfolio?
Electric buses appear both inevitable and risky as an investment. In one sense, the entire globe is racing to go electric, and reducing bus emissions is one easy way to clean the air. On the other hand, many very small, speculative companies are chasing this goal, and it seems inevitable that not all of them will be successful investments.
We've already seen one high-profile bankruptcy in this sector, and other small, vulnerable companies are still trying to compete. Given the risks, the smaller, electric-focused companies are likely only a good fit for those with a high risk tolerance.
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But plenty of large, multifaceted manufacturers offer less risk and should benefit as electric buses go mainstream. Investors can also gain some exposure to electric buses without significant risk by exploring some of the many transportation-focused exchange-traded funds (ETFs) available.
It is often said that an investment portfolio can be a reflection of an investor's vision of the future they want. There's reason for hope that we are moving toward a world free of emissions-heavy buses. These stocks represent the companies helping that vision to become a reality.
