The potential of reducing fuel consumption, harmful emission and cost benefit for plug-in electric hybrid buses depended largely on the power management strategy for specific hybrid electric powertrain configuration, especially for those with compound energy storage system. Hybrid energy storage system in this research comprise high energy lithium iron phosphate batteries and super-capacitors, therefore, the key of improving the life cycle cost-benefit is to extend the cycle life for lithium battery. This paper presents an optimal control strategy for the serial-parallel plug-in hybrid electric buses based on the lithium battery degradation model to minimize life cycle operating cost. To derive the globally optimal strategy, an algorithm based on two-dimensional Pontryagin's minimum principle is proposed. With the optimal strategy, the battery degradation is significantly reduced, and the total cost is reduced by 21.7% compared with a plug-in hybrid electric bus with single type energy storage. Further embodies the advantages of hybrid energy storage systems and optimization algorithms. (C) 2018 Published by Elsevier Ltd.