4 months ago
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The share of electric buses (e-buses) in new bus sales across India is expected to double to 8% next fiscal from 4% in the last fiscal, driven by the central government’s focus on decarbonising the public transport sector and favourable total cost of ownership (TCO) for an e-bus vis-à-vis buses run on other fuels, CRISIL said in a report.
On the government’s initiative the rating agency said efforts were underway to deploy e-buses via tenders already awarded under the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles, or FAME, scheme and the National Electric Bus Programme (NEBP). And this has created demand for e-buses.
Now there is a favourable TCO of an e-bus compared with internal combustion engine (ICE) and compressed natural gas (CNG) buses, driven by lower operating cost and reducing initial acquisition cost, it said.
“Under the FAME and NEBP programmes, launched in 2015 and 2022, respectively, state transportation units (STUs) initiated e-bus procurement through two models: gross cost contract (GCC) and outright purchase. As many as 5,760 of these e-buses have been delivered till date, and 10,000 will be deployed in this and the next fiscal.” CRISIL said in the report.
Favourable contracting terms under the GCC model, such as assured rentals, fee revision linked to inflation, and absence of traffic risk have aided e-bus adoption thus far, it added.
Sushant Sarode, Director, CRISIL Ratings said, “Growth in e-buses is also supported by favourable ownership economics. TCO for e-bus is estimated to be 15-20% lower than ICE and CNG bus, over an estimated life span of 15 years with breakeven in 6-7 years.”
“Though the initial acquisition cost of e-bus is twice that of an ICE or CNG bus, it is expected to reduce on account of improving operational efficiency of original equipment manufacturers (OEMs) with increasing scale and localisation and decreasing battery costs,” he added.
