The Yellow Bus Goes Electric: Inside America’s School Fleet Transition

On a cold weekday morning, students shuffle toward the curb with backpacks in tow. When the school bus pulls up, there’s no familiar diesel rumble or plume of exhaust. Hearing the low electric whir, a few parents glance up, realizing this morning’s stop is different from the others. No fumes, less noise and a quieter start to the school day.

Scenes like this are becoming more common across the United States as one of the nation’s most recognizable vehicles undergoes a major shift. Long associated with the noise and pollution of conventional engines, the American school bus is now becoming a central part of the transition to cleaner, smarter transportation systems.

The Yellow School Bus: An American Icon With a Unique Market

For nearly a century, the yellow school bus has been woven into American life. According to the New York School Bus Contractors Association (NYSBCA), more than 26 million students ride daily in a fleet of around 480,000 school buses, making school buses the country’s largest form of public transportation. Demand is shaped primarily by school district budgets, state regulations and federal funding cycles rather than direct consumer preferences.

The market is concentrated among three dominant manufacturers: Blue Bird, Thomas Built Buses (a Daimler Truck brand) and IC Bus (part of International/TRATON). Together they supply almost all the 35,000–40,000 new buses sold each year. Year-to-year sales fluctuate with replacement needs and incentive programs, but overall demand remains steady, with long-term growth on the horizon. The market is projected to reach 44,000 annual units sold by 2035.

From Gasoline and Diesel to a More Diverse Powertrain Mix for School Buses

For decades, gasoline and diesel have powered nearly all school buses. Though diesel became the primary choice over time, gasoline has reemerged as a practical alternative due to lower initial costs, fewer emissions-related issues, quieter operations and faster cold-weather starts. Some gasoline-powered buses are also converted to run on propane, marketed as a cleaner-burning option.

Still, concerns about emissions and maintenance costs are encouraging school districts to consider their options. Electrification, supported by regulations, subsidies and rising public expectations for clean air around children, has emerged as the next major step.

The Push Toward School Bus Electrification

The move to electric school buses is part of a nationwide trend. The EPA’s Clean School Bus Program has already committed billions of dollars to help districts replace aging diesel models with zero-emission alternatives. While the current administration may reduce funding for electric vehicles, states continue to invest in electric school buses—especially in disadvantaged or high-pollution communities. So far, funding freezes have not significantly slowed electric bus adoption.

Original equipment manufacturers (OEMs) are moving ahead:

• IC Bus (International/TRATON) leads the school bus market with more than 12,000 units produced in 2025, offering both conventional engine (CE) and rear engine (RE) electric configurations.
• Blue Bird delivered more than 1,100 electric school buses in 2024, with overall production expected to exceed 13,000 units by 2030.
• Thomas Built’s electric B2 model is rolling out in multiple states.
• BYD and GreenPower, new school bus OEMs, have entered with electric-only platforms.

Electric school buses align naturally with district operations. Routes are predictable, daily mileage is manageable and buses sit idle for long periods, offering ample time for charging. But cost and infrastructure remain barriers. Electric buses can cost almost three times as much as diesel-powered ones, and many districts struggle to secure or install charging infrastructure.

Still, Escalent’s Q3 2025 Commercial Vehicle Competitive Landscape projects that by 2030, more than 20% of school buses produced in the US will be electric, rising to nearly 45% by 2035. Hybrids will also play a meaningful role, accounting for roughly 25% of all school buses produced by 2035.

Connectivity and Smarter Fleet Operations for School Buses

As districts explore new powertrains, they’re also modernizing how their fleets operate, integrating data management, safety oversight and logistics coordination. This marks a clear shift from the traditional focus solely on student transportation.

Fleet managers increasingly rely on telematics systems to track performance, schedule predictive maintenance and optimize routes. In addition, school bus safety is a prime requirement, with onboard cameras, student ID card systems and driver monitoring tools becoming standard. And for parents, apps linked to GPS trackers provide real-time updates. No more guessing if the bus is running late.

These systems also align with broader smart-city ambitions, as municipalities look to incorporate school transportation into connected urban infrastructure. For example, electric school buses can be used as reserve power sources. Vehicle-to-grid (V2G) technology allows buses to store energy and send it back to the electrical grid when buses are not in use. This can help alleviate grid capacity in peak demand, or provide emergency power, as well as provide a revenue stream for school districts.

Policy: The Quiet Force Driving School Bus Change

Policy decisions remain the single biggest factor driving school bus purchases. The EPA’s multibillion-dollar grants, California’s aggressive emissions targets, and state-level mandates are all pushing districts toward electrification.

But procurement isn’t easy. Districts must navigate a mix of federal, state and local programs, and applying for grants is complex. In addition, cash-strapped districts struggle to cover the difference between subsidies and actual costs.

The industry is also learning from early challenges. LION’s bankruptcy demonstrates the risk of relying on newer OEMs without long-term stability or established support networks. However, the trend to electrify school buses will continue to gain momentum.

The Road Ahead for Electric School Buses

By the mid-2030s, electric school buses could dominate new purchases, supported by falling battery costs and expanded charging networks. We’ll see some districts experimenting with V2G, turning fleets into mobile energy assets.

However, the pace of adoption will vary widely. Urban districts with clear air-quality goals and higher budgets will likely move fastest. Rural districts with longer routes and tighter budgets will transition more slowly.

Infrastructure gaps could also slow progress. And while gasoline and diesel powertrain purchases will slow down, they won’t disappear overnight.

The yellow school bus has always been more than a vehicle. It’s a symbol of community. Now, as it shifts to electric power, it may also become a symbol of America’s willingness to embrace change, one morning ride at a time.

Five Recommendations for OEMs, Body Manufacturers and Suppliers, and School Districts

1. Plan for funding swings

Federal EV funding may contract and some states may scale back incentives, so build plans assuming partial—not full—coverage from grants.

2. Match strategy to regional realities

Urban districts may prioritize electrification, while rural districts with long routes may rely on diesel or gasoline longer. Adjust production, sales and fleet plans accordingly.

3. Start EV charging infrastructure planning early

Charging installation takes time and coordination. Engage utilities, permitting offices and infrastructure partners well before procurement.

4. Use every available resource

School bus associations, peer districts and industry groups regularly share funding opportunities and lessons learned, which is especially helpful for smaller districts.

5. Take a total-fleet approach

Telematics, charging software, route optimization tools and V2G readiness help improve uptime and long-term ROI, not just the vehicle itself.

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