Indian market may witness sale of 6,490 e-buses in next two years

As the electric bus market in the country has gained strong momentum in the recent years, India is expected to witness sale of about 6,490 electric buses over the next two years.

In September 2017, the first commercial e-bus operations began in India in Himachal Pradesh. Since then, the e-bus market has been evolving substantially. By March 2020, about 1,031 e-buses were sold across different States and transport undertakings. During this fiscal, about 1,850 buses are likely to be sold and in the next fiscal about 4,640 units are expected to be sold, according to the estimates of JMK Research. This high growth rate can be anticipated on the grounds of an ever-growing Central government impetus as well as stronger consumer affinity (post Covid-induced lockdown) for electrification of mobility, it said. Until FY18, only 31 e-buses were sold in India. FY19 saw an increment of 369 e-buses in sales and the sale of e-buses increased YoY in FY20 by 50 per cent to reach 600 units. This rise in e-bus sales in the last two fiscals can be attributed to aggressive governmental push through FAME scheme.

The highest number of e-buses deployed in any State under FAME 1 as on April 16, 2020 is 80 in West Bengal, which is closely followed by Maharashtra (70). Out of the total 400 buses deployed under FAME 1 in the country, the majority of 215 buses have been supplied by Tata Motors.

The e-bus market growth is fuelled by over $1 billion worth of investment deals forged in the past few years with investors of varied business backgrounds.

Several global players are also eyeing the e-bus market in India leading to the formation and operation of four joint ventures - (Olectra-BYD, Foton PMI, JBM Solaris, VECV) in this market.

Public transport

While there are still a few challenges pertaining to e-bus charging infrastructure in India, the e-bus market has the potential to fill the void that exists in the Indian public transport system.

Apart from being cleaner and greener, the major advantage of an e-bus is its extremely low operational and maintenance (O&M) expenditure per unit km. The total cost of ownership (TCO) of e-buses is 10-20 per cent lesser than that of diesel buses.

Many private players are expected to foray into various businesses in the e-bus market such as e-bus components, passenger services, said the research report.

Many central initiatives (like lower GST rates, FAME scheme) and EV policy incentives of several States (like Road tax or permit fee concessions, manufacturing incentives) have been able to streamline different processes such as e-bus financing and procurement and also promote creation of entire e-bus value chain within these States.

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