Electric buses (e-buses) in India are expected to account for a significant portion of new bus sales by FY2025, as projected by ICRA, a leading rating agency. The e-bus segment is set to represent 11-13% of new bus sales by FY2025, signifying a pivotal shift towards electrification in India’s public transportation sector. This growth is underpinned by several factors, including operational savings compared to conventional diesel buses, government subsidies, and advancing technologies that are reducing the capital costs associated with e-buses.
Several state Electric Vehicle (EV) policies have set specific targets and timelines for e-bus adoption, creating a structured roadmap for electrification. These policies are instrumental in fostering a conducive environment for the growth of the e-bus market. The penetration of e-buses has already reached 7% in FY2023, showing a consistent improvement in volumes and market share.
The Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme has played a significant role in this growth. The scheme is expected to continue boosting the e-bus segment until its expiry in March 2024. Furthermore, Convergence Energy Services Limited (CESL) has been actively involved in stimulating e-bus adoption through bid aggregation under various tenders. These initiatives have seen substantial interest and participation from Original Equipment Manufacturers (OEMs), despite the absence of subsidies in some tenders.
The government has also launched the PM e-Bus Sewa scheme, aiming to provide 10,000 e-buses to 169 cities under a Public-Private Partnership (PPP) model. This scheme, along with the FAME II scheme, is expected to support e-bus volumes as subsidies get gradually phased out.
In terms of market size, the India Electric Bus Market was valued at USD 27.39 million in 2022 and is projected to grow at a CAGR of 7.61% to reach USD 330.78 million by 2028. Key players in the Indian Electric Bus Market include Ashok Leyland, Foton-PMI, JBM Auto Ltd, Olectra Greentech Ltd, and Tata Motors, with the Hybrid Electric Vehicle (HEV) segment currently holding the largest market share. The Battery Electric Vehicle (BEV) segment is expected to be the fastest-growing in 2023.
The growth of the e-bus market in India is a testament to the country’s commitment to sustainable transportation and reducing carbon emissions. The combined efforts of the government’s policies, the active participation of OEMs, and the evolving technology landscape are set to transform India’s public transport system into a cleaner, more efficient, and environmentally friendly one.