Efficient battery capacity estimation is of utmost importance for safe and reliable operations of electric vehicles (EVs). This article proposes a battery capacity estimation framework based on real-world EV operating data collected from forty electric buses of the same model operating in two cities. First, a reference capacity calculation method is presented by combining the Coulomb counting method with the incremental capacity analysis method. Then, the impacts of temperature, current, and state-of-charge on battery degradation are quantitatively analyzed. Using the historical probability distributions as battery health features, a hybrid deep neural network model that combines a convolutional neural network with a fully connected neural network is proposed for battery capacity estimation. The validation results show that the proposed model outperforms the state-of-the-art methods and reaches a mean absolute percentage error of 2.79%, while maintaining low computational cost.