The traction in the e-bus segment is already visible over recent months, despite the overall stress in the public transportation segment over the past year-and-a-half due to the pandemic. Although the on-ground deployment under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (Fame) scheme has been somewhat delayed on account of the pandemic-induced challenges, the ratings firms said in a note.    

“Electrification in other geographies like Europe is also picking up gradually. In India too, significant incentives and subsidies have been announced through various schemes to reduce cost of acquisition, and spur e-bus adoption, while many state EV policies have announced specific electrification targets and timelines for buses, thereby helping create a roadmap for electrification," added the analysts.  

They further noted that the Gross-Cost Contract (GCC) model, or opex model of operations, has emerged as the preferred route for e-bus adoption in India, especially as the Fame two scheme offers capital subsidy only for buses procured under this route. This model helps to significantly alleviate the upfront capital burden on cash-strapped SRTUs, while spurring electrification by increasing private participation in the segment. 

The government extended the second phase of the Faster Adoption and Manufacturing of Hybrid and Electric vehicle (Fame) scheme by two years to 31 March 2024 to push sales of electric vehicles. 

Department of heavy industries also announced a 50% increase in incentives for electric two-wheelers to  ₹15,000 per kilowatt hour from  ₹10,000 per kWh. According to the new rules, the cap on incentives will be limited to 40% of the total price compared to the earlier cap of 20%. The ministry of heavy industries has also mandated Energy Efficiency Services Ltd (EESL) to procure 300,000 electric three-wheelers for use by different authorities.  

“Among the various automotive segments, buses would be among the first ones witnessing faster electrification, especially for intra-city operations. While limited charging infrastructure, range anxiety and high capital costs have been the key deterrents in electrification across segments, these are relatively low for the bus segment. Overall, ICRA expects that electric buses are likely to account for 8-10% of new bus sales by FY2025," said Rohan Kanwar Gupta, vice president and sector head, ICRA Ratings.

Source: https://www.livemint.com/news/electric-buses-to-account-for-8-10-of-new-bus-sales-by-2025-11629617187580.html