The Australia Institute report, released on Wednesday, revealed that just 200 of almost 100,000 buses registered in Australia were electric, even though the vehicles were growing in popularity in China, Europe and North America.
Transport industry experts called for state governments to set bolder targets for zero-emission public transport, saying the vehicles would not only save money but also reduce air pollution and noise, and create local business opportunities.
The study, titled Slow Lane, found electric buses made up 0.2 per cent of buses registered in Australia by the end of the 2022, which it called a "pitifully small number ... considering the broad benefits of electric buses".
New South Wales led the transition, the report found, with 101 electric buses on order, followed by Victoria with 41 electric buses on roads, Queensland with 18 promised this year, the ACT with 12 in operation, and Western Australia with four electric models.
State government commitments to electric buses ranged from a complete transition in the ACT by 2040 and NSW by 2047, to all new bus purchases being electric by 2025 in Victoria and southeast Queensland.
But Australia Institute research director Rod Campbell said the electrification was happening too slowly, and the study's findings showed state governments needed to set more ambitious goals or risk missing climate targets.
"Electrifying bus fleets is an easy first step that state governments can take towards achieving their net-zero goals," he said.
"Because the majority of the some 100,000 buses in Australia are publicly owned or funded, the pace and scale of transition can be accelerated dramatically by state governments, should they wish."
Mr Campbell said the report showed overseas markets had already swapped diesel buses for electric models, including the Chinese city of Shenzhen, which electrified its entire fleet of 16,359 buses.
He said the move to electric public transport vehicles would do more than cut carbon emissions.
"There are multiple co-benefits to bus electrification, including reduced air and noise pollution, reduced road congestion, and opportunities for manufacturing and maintenance jobs," Mr Campbell said.
Dan Porter, chief commercial officer from bus manufacturing company Nexport, said Australia's move to electric vehicles presented a substantial business opportunity.
The Sydney firm has produced 80 electric buses to date, importing their chassis from overseas suppliers and building their bodies and panelling locally.
Mr Porter said the development of large-scale electric bus manufacturing in Australia would be "dependent on how fast the government uptake is".
"(Governments have) all done their trial processes, they've done their due diligence, and you can see that wave starting to build," he said.
"Over the next two years there should be a really fast uptake."Â
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