The friction between the tires and the road causes loss of energy in the form of heat-energy.
The term kinetic energy refers to the energy of an object that is in motion. The pasengers that are sitting at a point possess potential energy. If the bus stops suddenly, the potential energy of the passengers is converted to kinetic energy as they move forward.
Since friction causes loss of energy, the friction between the tires and the road causes looss of energy in the form of heat-energy.
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