India Electric Bus Market Expected to Exhibit Huge Expansion in Future

Posted by Rahul Gautam on December 2nd, 2020

There has been a sharp rise in the popularity of electric vehicles in India over the last few years. This is mainly because of the increasing pollution levels and global warming in the country. In addition to this, the soaring number of incentives, in the form of investments and subsidies, being implemented by the government is further boosting the adoption of electric vehicles across the country. The Ministry of Heavy Industry and Public Enterprise drafted the eligibility criteria and guidelines for the availing of the FAME II incentives for passenger vehicles, two-wheelers, and electric buses in March 2019.

Similarly, “the Green Mobility Scheme was enacted by the Ministry of Housing and Urban Affairs (MoHUA) at the Urban Mobility India (UMI) Conference and Expo in November 2017 for revolutionizing the public transport infrastructure in 103 cities across the country”. “This would be achieved by the procurement of 6,000 regular buses and 20,000 paratransit vehicles running on alternative and clean fuels”. Furthermore, the Ministry is rapidly implementing various other programs such as the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and the Smart Cities Mission for developing urban infrastructure, especially the utilities and promoting the adoption of green mobility.

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Besides the favorable government policies and measures, the rapidly falling prices of the Lithium-Ion (Li-ion) batteries is also fuelling the demand for electric buses in the country. “As per the observations of the industry leaders, the average costs of the lithium-ion battery cells, for large orders, reduced from approximately 00 per kilowatt-hour (kWh) to nearly 3/kWh from 2010 to 2018”. As these batteries account for almost 25–40% of the total manufacturing costs of the electric buses, their falling prices would significantly propel the sales of electric buses in the country in the future years. 

“Across the country, the Indian electric bus market registered the highest growth in the southern region of the country during the last few years”. This is mainly credited to the high sales of electric buses in the southern states and cities in the last several years. However, despite the high requirement of the electric buses in the southern region, the market growth rate in the region would be outpaced by that in the northern region in the upcoming years.

Hence, with the growing implementation of favorable government policies and measures and the reducing costs of lithium-ion batteries, the sales of electric buses will surge all over the country in the years to come.