The study investigates the environmental impacts of electric city buses based on the storage technologies applied and the degree of electrification within the Finnish context. Lithium iron phosphate (LFP) and electrochemical recuperator (ECR) were selected as storage technologies. ECR can be an alternative to the lithium-ion battery; however, little is known regarding its environmental performance when applied to electrify city buses. The study focused on diesel buses, battery electric buses (BEB) and plug-in hybrid buses. Life cycle assessment (LCA) was used to assess the potential environmental impacts between storage technologies and the degree of electrification. Primary data from the industry was used to assess the impacts of manufacturing ECR. The results showed that manufacturing a kWh of ECR generated a global warming potential (GWP) of 178 kg CO2-eq, higher than LFP. However, its application indicated that ECR performed better. The impacts of using ECR and LFP in BEB were 385 g CO2-eq/km and 441 g CO2-eq/km, respectively. The hybrid system generated 652 g CO2-eq/km and 670 g CO2-eq/km for ECR and LFP, respectively. The study also showed no consistent pattern between the degree of electrification and environmental benefits. Scenario analysis revealed that BEB provided the best GWP when assessed using a Finnish and Norwegian electricity mix, while the hybrid system performed the best when Polish electricity was applied. This study demonstrated that storage technologies, degree of electrification, fuel consumption, and electricity sources affect environmental performance. Careful assessment is needed before deciding to electrify the city’s transport system.