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This paper discusses whether it is possible to improve the motor efficiency by a two-speed transmission in an electric bus, and if so, to what extent. Based on the China Bus Urban Cycle, an 8-meter electric bus was studied via simulation in Matlab/Simulink. The comparison of motor efficiency between two different configurations was made: direct drive and drive through a two-speed transmission. In the first part of the simulation, the speed ratios of the two-speed transmission were chosen as 1.5 and 3.5. The motor efficiency was improved by 1.22% for driving and 1.66% for generation. To find out the maximum improvement and corresponding optimal speed ratio combination, scanning experiment of the lower ratio and upper ratio was conducted in the second part. As much as 1.66% improvement of driving efficiency and 2.20% of regenerating efficiency was achieved.