In India, deployment of electric buses has increased from zero in 2017 to 4,647 buses in 2021, reaching an estimated market size of around USD127 million. Around two-thirds of these are midi 9-metre buses and the remaining one-third are standard 12-metre buses. The cities of Pune and Delhi account for more than a 50 per cent share of the e-buses deployed in India.
In terms of charging infrastructure, as of August 2022, state road transport corporations (SRTCs) have installed 2,826 public charging stations and oil marketing companies (OMCs) have set up 3,448 charging stations at their retail outlets.
Figure 1 provides details about the deployment of electric buses in India.
Figure 1: Deployment of electric buses in India
Government policies and funding have been the drivers of this growth in electric buses in India. The main policies are:
- Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles-I (FAME I) from 2015–2019: The scheme had an outlay of INR8.95 billion. A total of 425 electric and hybrid buses were deployed across cities, with a government incentive of up to INR2.80 billion during Phase I.
- Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II) from 2019–2024: The scheme has an outlay of INR100 billion. It provides incentives for creating EV charging infrastructure for 7,090 e-buses, with a subsidy of up to INR5 million per bus.
Table 1 summarises the key issues faced during implementation of FAME I and the issues sought to be addressed in FAME II.
Table 1: Analysis of FAME I and FAME II
- The Production Linked Incentive (PLI) scheme for the manufacturing of advanced chemistry cells (ACCs) from 2021–2026: The scheme has an outlay of INR181 billion and aims to establish a competitive ACC battery manufacturing setup of 50 gwh and 5 gwh of niche technologies in the country.
- The Phased Manufacturing Programme (PMP) has been introduced to encourage the domestic manufacturing and assembly of EV components.
- The Goods and Services Tax (GST) on EVs has been reduced from 12 per cent to 5 per cent and that on charging stations has been cut from 18 per cent to 5 per cent.
In addition, other initiatives like vehicle scrappage, de-licencing of public charging stations, green licence number plates for EVs, exemption from permit requirements, adoption of state EV policy, and electric charging tariff policy have been introduced to incentivise the deployment of electric vehicles.
Prevalent Battery and Charging Technologies
Lithium Iron Phosphate (LFP) batteries with a capacity of 150–180 kwh and plug-in charging are prevalent in India. However, in the case of e-buses, it is difficult to achieve the required daily operational kilometres with the available battery without opportunity charging during the day. This has reduced the operating efficiency and passenger-carrying capacity of buses. There is scope for shifting to Lithium Titanium Oxide (LTO) batteries with pantograph charging in order to achieve operating efficiency without compromising on service levels.
Table 2 provides a comparison of the battery and charging technologies currently available in India.
Table 2: Comparison of battery and charging technologies
Contracting Models and Total Cost of Ownership (TCO)
Gross Cost Contract (GCC) is the mandatory operating model under FAME II. The manufacturers own, operate, and maintain the buses, batteries, and charging infrastructure and get a fixed per km remuneration from the SRTCs. This reduces the performance risk faced by the SRTCs. The buses are supplied with batteries of higher capacity (150–180 kwh) in the GCC model.
Figure 2 provides details about the Gross Cost Contract business model.
Figure 2: Gross Cost Contract business model
The total cost of ownership (TCO) of EVs depends on various factors like capital cost (battery cost), operational cost (electricity and diesel prices), and maintenance cost (cost of spare parts and cost of regular maintenance of vehicles).
Studies have shown that e-buses are more economical than diesel buses for operations of more than 200 km per day and if operated for at least six years. With the reduction in battery costs and the higher utilisation of vehicles, the TCO of e-buses works out be lower than that of diesel buses.
Table 3 provides details about the TCO of electric buses and diesel buses.
Table 3: Comparison of TCO of electric bus and diesel bus
- In June 2022, Tata Motors secured the tender floated by Convergence Energy Services Limited (CESL) under FAME II to deploy 5,450 electric buses worth INR50 billion across Kolkata, Delhi, Bangalore, Hyderabad, and Surat for 12 years. The bidding was held across five categories of e-buses – 12-metre low-floor AC and non-AC, 12-metre standard floor non-AC, and 9-metre standard floor AC and non-AC types.
- In July 2022, Olectra Greentech secured a contract from Telangana State Road Transport Corporation (TSRTC) to supply, operate, and maintain 300 electric buses for 12 years. The cost of the project is estimated at INR5 billion. The buses will be delivered over a period of 20 months.
- In July 2022, PMI Electro Mobility Solutions Private Limited (PEMSPL) secured a contract to supply, operate, and maintain 100 electric buses for the Rajkot Municipal Corporation in Gujarat. PMI will operate these buses for 10 years. The order is in addition to a previous order for 50 electric buses.
- In August 2022, Hinduja Group’s EV arm, Switch Mobility, collaborated with Chalo (a transport technology company) to deploy 5,000 electric buses worth INR79.5 billion in three years in cities where Chalo is currently operating. Switch Mobility will own, operate, and maintain the EiV12 model variants. Chalo will deploy charging infrastructure and technology solutions like live tracking, route planning, and purchase of digital tickets through app and card respectively.
- In August 2022, Switch Mobility in collaboration with Brihanmumbai Electric Supply and Transport (BEST) deployed the first electric double-decker bus in Mumbai. Further, there are plans to deploy 200 additional buses, starting from December 2022.
- In August 2022, Delhi Transport Corporation (DTC) procured 97 e-buses, to be added to DTC’s existing fleet of 153 e-buses. Further, DTC aims to achieve a fleet size of 1,800 e-buses by end-2023 and of 8,000 e-buses by end-2025. DTC also plans to redesign 55 bus depots for charging e-buses by end-2023.
- In September 2022, Maharashtra State Road Transport Corporation (MSRTC) announced plans to deploy 150 electric buses by December 2022. Out of the 150 buses, 100 buses will be deployed on the Mumbai–Pune route and the remaining 50 buses will be deployed on other inter-city routes.
- In September 2022, Thane Municipal Transport (TMT) announced plans to deploy 123 electric buses in the city. In September 2022, a consortium of Olectra Greentech and Evey Trans Private Limited secured a contract worth INR1.85 billion to supply, operate, and maintain the buses for a period of 15 years. The buses will be procured over the next 12 months.
Issues and Challenges
The major challenges faced in the large-scale adoption of e-buses are:
- Frequent rebidding and lack of participation on the part of private players: A review of the bids indicated that, on an average, the highest quote for 12-metre buses was 78 per cent more than the lowest bid, indicating a disparity in the understanding of market prices between the transport agencies and the bidders. Variation was also noticed in terms of the range requirements (assured km per day) for cities. Further, non-favourable terms such as low per km rate have led to lack of interest on the part of private players.
- Financing issues: Indian banks have been unwilling to provide loans and issue guarantees due to apprehensions related to new technology and to the unknown residual value of buses. Tamil Nadu State Transport Corporation (TNSTC) has received a loan worth INR16 billion from the German development bank KfW to procure 2,000 e-buses. Pune Municipal Corporation and Pimpri Chinchwad Municipal Corporation have procured buses (outside the FAME scheme) through Smart City funds and have received a subsidy of INR5 million per bus.
- Ownership issues: Electric buses are owned by transport agencies during the concession period. Bus operators neither have a mandate in the route rationalisation nor are they given incentives for operating low-revenue routes. This has made private players reluctant to enter into contracts with transport agencies.
- Rigid procurement structure: The application of nationwide policies in states with different demands and financial circumstances has become a challenge. The FAME II subsidy is capped at INR5.5 million per bus, which is available only for high-end buses with a battery capacity of 320 kwh. This gives a range of 270 km, which means that buses plying in towns and even in big cities where there is a demand for bigger batteries will not be able to utilise the subsidy fully. For example, the buses deployed on the longer airport routes in Bengaluru will be able to utilise the subsidy more than the buses deployed on shorter routes.
- Challenges related to the creation of charging infrastructure: EV charger specifications, corresponding electricity grid connection, requirement of ancillary infrastructure, cost of installation, and necessary spatial provision are important aspects that need to be considered for the creation of charging infrastructure. For example, lack of land for building depots and terminals has become a challenge in the deployment of e-buses in Mumbai. Brihanmumbai Electric Supply and Transport (BEST) has procured compact distribution transformers which occupy 75 per cent less area than ordinary transformers. Further, agencies have come up with a reference sheet outlining the specifications for charging stations for deploying AC III charging technology. In Delhi, the provision of power required for electric bus operations (>4 MVA) has become a challenge. As a result, Delhi Transport Corporation (DTC) has prioritised depots for commencing electric bus operation in the coming years.
Olectra Greentech Limited, Tata Motors, Causis E-Mobility, PMI Electro Mobility Solutions Private Limited (PEMSPL), Switch Mobility (the e-mobility arm of Ashok Leyland), JBM Motors Limited, Deccan Auto Limited, Eicher Motors Limited, Zhongtong Bus & Holding Company Limited, and BYD Company Limited are some of the key players in the manufacturing and operations of e-buses in India.
Table 4 provides details about the key players and their respective electric bus models.
Table 4: Key players and their respective offerings
The companies have localised the manufacturing and assembly of EV components to a large extent, but battery cells are still mainly sourced from China. However, the companies have announced plans to partner with Indian cell manufacturers to localise cell sourcing also. The buses can be fully recharged in three to four hours and can travel up to 300 km per charge.
Further, the buses are equipped with electronically controlled air suspension system, advanced disc braking system, power assisted steering system, closed circuit television (CCTV) cameras, dashboard for engine monitoring, universal serial bus (USB) sockets for each seat, lightning protection system, and zero CO2 emission. The operators have redesigned public transport depots with interoperable charging systems for e-buses.
CESL, along with the World Resources Institute (WRI) India, has announced plans to deploy 50,000 electric buses worth USD10 billion by 2030 under the Grand Challenge tender programme. The tender represents e-mobility as a service and homogenised demand for electric buses aggregated across nine cities.
Further, the programme will be in tandem with the target to reduce India’s carbon emission by 1 billion tonnes by 2030 and to achieve net-zero emission by 2070.
An entity such as an E-bus Procurement Corporation (EPC) needs to be established. Such an entity will be responsible for developing bidding procedures and procurement standards, coordinating with central and state bodies, and coordinating in disbursing central funds in order to streamline the deployment of buses.
The cost of e-buses is expected to come down with domestic manufacturing, technological advancements, economies of scale, operational efficiency, and incentives. This will promote mass deployment of e-buses in the future.