India deployed its first electric bus service in 2017 in Manali, Himachal Pradesh. Since then, it has ramped up efforts to deploy e-buses

In a massive push for green mobility and sustainable public transportation system, the Indian government recently approved a scheme that envisages a deployment of 10,000 electric buses – along with charging and associated infrastructure – in nearly 170 cities. Named ‘PM-eBus Sewa', it is set to cost over Rs 57,000 crore and will also “foster innovation” in the e-mobility sector. The government eventually aims to introduce 50,000 electric buses nationwide to curb harmful emissions in the transport sector.

The government said this scheme is expected to bring in economies of scale for procurement of electric buses through aggregation for e-buses.

The initiative comes at a time some bus manufacturers have raised concerns over delayed payments by state transport corporations for their previous orders owing to their poor financial health. According to the latest MoRTH financial data , the 56 State Road Transport Undertakings (SRTUs) collectively have a debt of Rs 380 billion. Besides, they reported a combined net loss of about Rs 180 billion in FY 2018-19. Setting up of a government-owned electric bus fund can surely boost the confidence and provide a security net to private companies and start-ups vying for future contracts for electric vehicles.

The ‘PM-eBus Sewa' initiative also supports the urgent need to rapidly shift to cleaner energy-powered vehicles in public transportation to cut down the rapidly increasing greenhouse gas (GHG) emissions. Electric buses do not produce tailpipe emissions, thus not directly adding to air pollution.

Fig 1. Many believe the ‘PM-eBus Sewa' scheme has come as a welcome boost to India’s electric mobility ambitions.

A study published in ScienceDirect journal has said that lifetime costs favour operating an e-bus by 62% and hybrid-electric bus by 50% when charging is done from the national grid. Solar charging can further lower lifetime costs by 19 and 47%. Additionally, an ICE bus emits 3.46 times the emissions of an electric bus over their lifetime. If charging is done by solar, then the ICE bus emits 329 times more. Even four-wheeler EVs score better than ICE vehicles during their entire life cycle.

How has India accelerated its EV journey?

In 2017, two years after the Paris Agreement was adopted, India deployed its first electric bus service in Manali, Himachal Pradesh. Since that pilot project, the country has added an estimated 5,000 e-buses of various configurations so far. In 2022, India launched an ambitious National Electric Bus Programme (NEBP) with an aim to deploy an additional 50,000 electric buses over five years, backed by a significant investment of Rs 820 billion.

While some argue that the start for India’s EV journey has been slow, it appears to have accelerated in recent years with the continuance of schemes like the FAME and the launch of the ‘PM-eBus Sewa' initiative. The second phase of the four-year FAME scheme, launched for the first time in 2015, is set to conclude in 2024. The government has already started consultations for the third phase.

Despite the government’s sincere efforts, less than 5,000 buses of the over 359,000 registered buses in India since the launch of the FAME incentive are electric. The government launched the FAME scheme to boost manufacturing and adoption of EVs in the country. The first phase was implemented between 2015 and 2019 and the second phase with a greater outlay was launched in 2019; it is set to conclude in 2024.

Making up for the time lost

Many believe the ‘PM-eBus Sewa' scheme, which is expected to create 45,000 jobs, has come as a welcome boost to India’s electric mobility ambitions. Already several states have launched electric buses and are planning to procure more. They have begun to keep aside a budget for EV deployment.

For instance, Delhi is already running 400 electric buses under the FAME II scheme. Another 400 e-buses were added to the fleet ahead of the G20 Summit. The Delhi government has pledged that by the end of 2025, 80% of buses in the city will be electric. The Delhi EV Policy aims to create an entire supply-chain ecosystem for this new segment of vehicles.

The Uttar Pradesh government plans to more than triple their fleet of electric buses in five major cities, including Lucknow, Varanasi and Ayodhya, within a year. The state government has also given a major thrust in its EV policy on creating the charging infrastructure to support the transition.

The Maharashtra State Road Transport Corporation (MSRTC) earlier this year placed one of the biggest orders for e-buses. It plans to run these vehicles on inter-city corridor routes like Mumbai-Pune, Pune -Nashik on freeways. The charging facilities will be developed along the routes.

What’s happening around the world?

Last year, nearly 66,000 e-buses were sold worldwide. This accounted for about 4.5% of all bus sales globally. China has been at the forefront of this. Of the total buses sold worldwide, China sold 54,000, that is about 80% of global sales. In addition, many of the buses and trucks being sold in parts of the world, including the US and Europe, are Chinese brands. Analysts say China made wise decisions early in its EV journey. It invested heavily in creating sufficient infrastructure for a seamless adoption of electric vehicles, besides tax breaks and subsidies. China now has the largest charging network in the world. Encouraged by the booming industry, EV makers from around the world jumped in to corner the market, helping it in its transition to clean mobility.

Several others are now waking up to the idea. In February, the European Union proposed ambitious CO2 standards for trucks and urban buses (100% zero-emission city bus sales by 2030). The US too has announced substantial new funding for zero-emission buses and trucks in 2022 under the Inflation Reduction Act.

India is also  encouraging manufacturers to invest in the country through subsidies and tax breaks.