The cost of purchasing and operating electric buses has declined significantly, according to government data

The cost of purchasing and operating these vehicles has dropped significantly in response to the various government incentives aimed at increasing the acceptance of battery-powered buses and three-wheelers for public transportation.

According to government data, the cost of operating a battery-powered three-wheeler has decreased by up to 25% since 2016-17. The price of an electric three-wheeler is currently approximately Rs 3 lakh. Still, its total cost of ownership (TCO) is around Rs 2.1/km, as opposed to Rs 2.8/km for the petrol version and Rs 2.32 for the CNG version.

An individual’s total cost of ownership is calculated based on their acquisition and operational costs throughout their service.

There has been a substantial decline in the price of battery-powered buses, from about Rs 2.5 crore in 2017 to Rs 91 lakh to Rs 1 crore now, which has resulted in a decrease in the total cost of ownership. Even though diesel (about Rs 34 lakh) and CNG (about Rs 38 lakh) buses are more affordable, sources indicate that electric buses operate at a 23% lower cost than CNG buses and a 27% lower price than diesel buses.

It is consistent with global trends, indicating that electric buses have a lower total cost of ownership than high-end and low-end diesel buses.

Based on the battery size, the TCO of a 12-meter electric bus ranges from Rs 53.77/km to Rs 77.75/km. In India, the TCO of battery-powered buses is even lower than the global average, ranging between Rs 39.21/km and Rs 47.49/km, according to government statistics. It is impossible to determine the corresponding TCO figures for diesel and compressed natural gas buses.

As a result of the schemes, the cost of these electric vehicles has been reduced, which is likely to increase their acceptance. In addition to setting up charging infrastructure as part of the schemes, the schemes should increase acceptance further,” stated a senior official of the Ministry of Heavy Industries who requested anonymity.

The government is implementing two programs to assist with adopting electric vehicles – Faster Adoption and Manufacturing of Electric and Hybrid Vehicles, or FAME, and Productivity-Linked Incentives for Auto and Advanced Chemistry Cell Battery Storage at localizing battery storage for electric vehicles.

By purchasing electric vehicles in bulk, the government hopes to generate demand for electric cars. The program’s second phase aims to produce 7,000 electric buses, 5 lakh electric three-wheelers, 55,000 electric four-wheeler passenger cars, and 10 lakh electric two-wheelers. Furthermore, the scheme provides support for the establishment of a charging infrastructure.

In June 2021, the central government designated CESL as the nodal agency for the FAME scheme that the Ministry of Heavy Industries leads to procuring buses.

As part of the second phase of FAME, the government announced the procurement of 5,000 electric buses from Tata Motors through competitive bidding in April.

As part of the FAME scheme, buses will be procured for various state transport undertakings, including Delhi. There are currently 4,000 buses in Delhi, of which approximately 250 are battery-powered. In the long run, the addition of electric buses to the fleet will contribute to reducing pollution.

Up to 30,000 diesel-run buses are anticipated to be replaced by electric buses within the next two-three years, providing manufacturers with $3.5 billion in business opportunities and contributing to the development of an ecosystem that will make electric buses more affordable.

Every day, over 1.6 million buses operate on Indian roads, most of which are powered by diesel. The majority of these are run by state transportation undertakings, most of which are incurring losses.