STATUS OF

ELECTRIC BUSES IN INDIA

As part of the project

E-mobilizing India:
Accelerating Sustainable
Electric Mobility in Indian Cities

1
June 2022

Prepared by

The Institute for Transportation & Development Policy (ITDP) is a global non-for-profit
organisation that works with cities worldwide to promote transport solutions that
reduce traffic congestion, air pollution, and greenhouse emissions while improving
urban liveability and economic opportunity. ITDP is represented in India by ITDP Pvt Ltd
and works with governments, multilateral agencies, and civil society to make visible,
on-the-ground improvements by providing technical expertise, policy solutions,
research publications, and training programmes.

© 2022
Licensed under a
CC BY-ND 4.0 license.

ITDP Team:

Vaishali Singh | Dhruv Soni | Sivasubramaniam Jayaraman

Layout: Smrithi Prasad | Aishwarya Soni | Varsha Jeyapandi

Acknowledgements

We would like to express our gratitude to ITDP for their constant support and
guidance while developing the report. We would also like to thank Anuj Dhole
and Sharada Gollapudi for their contributions in the making of this report, and
the entire team at ITDP India for their support.
 Preface

In the last decade, the private vehicle ownership has been on the rise, while the
ridership of public transport in many Indian cities has been reducing, leading to
an increased number of vehicles, and overall traffic along with their various
negative externalities like congestion, air and noise pollution, anxiety, etc.
These problems can be solved by encouraging people to use public
transportation, which has the potential to efficiently carry a large number of
people on the road. However, very few cities have formal public transport
system. Even among the cities with public buses, none of them have more than
60 buses per lakh of population in accordance with the benchmark prescribed
by Ministry of Housing and Urban Affairs (MoHUA) for Level of Service A. This
indicates an urgent need to augment the bus fleet.

To combat the problems of pollution and lack of buses, fleet augmentation

using the electric buses as presented itself as an ideal solution as ebuses have
zero tailpipe emission and 30-40% less overall emissions1. To accelerate the
process of adaptation of electric vehicles, the Department of Heavy Industries
launched Faster Adoption and Manufacturing of Electric Vehicles India (FAME
India). Under the FAME scheme, the State Transport Undertakings (STUs) or City
Transport Undertakings (CTUs) are given subsidies for the procurement of
electric buses for the public use as well as to put up the supporting charging
infrastructure. Benefitting from the scheme, many cities have already started
the electric bus operations.

This report aims to provide the status of the e-buses across cities and discuss
their experience. E-buses have been adapted before India in some countries,
hence, this report also discusses the global experience. Since e-bus is a new and
emerging technology, it is important to understand various aspects of e-bus,
battery and charging technology as well as the charging strategy, which are
covered comprehensively in this report.

1. Zero Emission Vehicles (ZEVs): Towards a Policy Framework. NITI Aayog. (2018)
Contents

01 Public Urban Buses in India 06

1.1 Introduction
1.2 Existing Scenario and Need for Electric Buses

02 Introduction to Electric Buses 11

2.1 Electric Bus Technology
2.1.1 Engine Technology
2.1.2 Battery
2.1.3 Battery Technology
2.1.4 Battery Chemistry
2.1.5 Types of Batteries
2.2 Charging Technologies
2.3 Charging Strategies

03 Electric Bus Experience Around the World

3.1 Introduction
3.1.1 China
21

3.1.2 Europe
3.1.3 North America
3.2 Financing of Electric Buses Across the Globe

04 Operationalising Electric Buses in India

4.1 Introduction
4.2 E-bus Market in India
30

4.3 Financing of Buses in India

4.3.1 FAME-I
4.3.2 FAME II
4.3.3 Beyond FAME

05 Way Forward 49
Source - Time

01
Public Urban Buses
in India
 1.1 Introduction
In urban India, almost 50% of people walk and cycle to work2, followed by public
transport, two-wheelers, cars, and autos. Just five per cent take cars. Public
transport in Indian cities varies across geographies, but bus transportation is
constant in most large urban centres.

While metropolitan cities such as Delhi, Mumbai, Chennai, etc. have multiple
modes like city buses, commuter rail, and metro rail; smaller towns such as
Ranchi, Gwalior, etc. rely mainly on IPT rather than buses. In large cities like
Hyderabad, Bengaluru, and Chennai, buses cater to more than 70% of public
transport trips2.

Walk & Cycle PT Auto 2W Cars

47% 22% 4% 22% 5%

Figure 1: Mode Share in Urban India (Source: Census, 2011)

Bus services in Delhi and Bengaluru recorded close to 44 lakh and 36 lakh trips
per day respectively in 2019-202 (before COVID-19). At first glance, the ridership
stats of some cities might seem rosy, but a year-to-year comparison lays bare
the problem that’s brewing beneath the surface. In the past few years, declining
ridership has been a cause for great concern for city bus operators. Mumbai’s
BEST has been witnessing a steep drop in ridership—from 39 lakh a day in 2012
to 28 lakh in 2019. With multiple waves of Covid-19, there has been a further
decline in bus transport ridership across all the cities.

The COVID-19 pandemic has prompted governments and authorities around the
world to impose restrictions on transport and mobility at an unprecedented
scale and magnitude. Physical distancing has a significant impact on mobility
behaviour and preferences. Many people have switched to a transport mode
that reduces the risk of infection. Because of this, since the pandemic began,
several cities have noticed a decline in bus ridership.

2. Census of India, 2011

3. Statista.com and Times of India

Status of Electric Buses in India 7

 Figure 2: Declining ridership in city bus systems (Source: CIRT and newspaper articles)

There are nearly as many daily trips made on buses in Chennai as there are in
Bengaluru. However, the fleet sizes are a sharp contrast in these two cities.
Bangalore runs around 6300 buses as compared to 3800 by Chennai. The
number of buses in other cities hasn’t increased proportionately with the rise in
population—resulting in overcrowding and reduced level of service. Chennai’s
Metropolitan Transport Corporation (MTC) carries over 1.9 times more
passengers per bus per day (1197) than Bangalore’s BMTC (623)4 which is an
indicator of overcrowding in buses.

1.2 Existing Scenario and Need for Electric Buses

According to the service-level benchmarks5 laid out by MoHUA for urban
transport, cities should have at least 60 buses per lakh population to achieve
Level of service (LOS) 1. Most mega-cities are at LOS 3 with 20-40 buses per lakh
population- resulting in a reduced level of service, except for Bangalore which is
at LOS 2 (40-60 buses per lakh population) and almost able to reach LOS 1.
Hence, there exists an immediate need to augment the fleet in most cities.

A large number of buses in India have internal combustion engines. Many cities
tried to introduce CNG buses but suffered from a shortage in supply of CNG. The
introduction of buses with stringent emission norms has also been slow given
the bad financial health of many transport undertakings.

4. CIRT (2021). State Road Transport Undertakings Profile and Performance 2018-19
5. http://www.utbenchmark.in

Status of Electric Buses in India 8

 Figure 3: Buses per lakh population in 2021-22

Figure 4: Buses by fuel type in 2018-19 (Source: CIRT)

In 1998, the Supreme Court of India issued a directive to replace or convert all
transport vehicles (buses, three-wheelers and taxis) to CNG in Delhi by April
2001. In addition, the court specified 70 CNG refuelling stations, and financial
incentives for the conversion of vehicle fleets be made available. This was a
result of a Public Interest Litigation filed by environmental activists concerned
with the quality of air in Delhi.

Status of Electric Buses in India 9

 The switch to CNG showed significant results, at least initially. A study6 by the
Washington DC-based Resources for the Future said the conversion of buses
from diesel to CNG has helped to reduce PM10, CO, and SO2 concentrations in
the city. Along with the conversion of public transport vehicles to CNG, many
cities and states in India, including Delhi, worked towards reducing emissions by
mandating low levels of sulphur in diesel, along with stringent emission norms.
In 2016, the Government of India issued a gazette notification7 mandating BS-VI
emission norms (equivalent to Euro VI norms) from April 2020 across India.

Meanwhile, emissions from motor vehicles continue to affect air quality. Adding
to the misery, personal motor vehicle ownership is on the rise in many Indian
cities. According to a study by the International Council on Clean Transportation
(ICCT)8, compared with other countries, India ranked second after China in the
number of deaths attributable to transportation emissions in 2015. The study
estimated 74,000 premature deaths due to transportation emissions in India.
This represents a 28% increase in annual transportation-attributable deaths in
the country compared with 2010.

The National Electric Mobility Mission Plan (NEMMP)9 lists achieving National
Fuel Security as one of its main objectives. India is one of the biggest importers
of crude oil. The NEMMP envisioned the sale of 6-7 millions units, which can
help in achieving liquid fuel savings of 2.2 – 2.5 million tonnes in 2020. This will
result in a substantial lowering of vehicular emissions and a decrease in carbon
dioxide emissions up to 1.5% in 2020 as compared to a status quo scenario.
Greater emphasis on the electrification of public transport will undoubtedly
have a positive impact on the reduction of emissions and reliance on fossil
fuels.

The Government of India deregulated the pricing of petrol in 2010 and diesel in
2014. This allowed oil marketing companies to determine the price of these
products, and revise them every fortnight. Since 2017, prices for petrol and
diesel are revised daily. As a result, the cost of diesel has increased manifoldly.
Urban public bus service providers spent an average of ₹17.77 ($0.23) per km on
fuel in 2018-1910 with an increase of ~14% over the previous year. As fuel prices
are expected to grow, transport undertakings should reconsider their spending
on fossil fuels, and utilize alternate sources of energy like electricity.

6. https://media.rff.org/archive/files/sharepoint/WorkImages/Download/RFF-DP-07-06.pdf
7. http://egazette.nic.in/WriteReadData/2016/171776.pdf
8. Health Impacts of Air Pollution from Transportation Sources in Delhi, ICCT. (2019)
9. https://dhi.nic.in/writereaddata/Content/NEMMP2020.pdf
10. CIRT (2020). State Road Transport Undertakings Profile and Performance 2017-18

Status of Electric Buses in India 10

 Source - Sustainable Bus

02
Introduction to
Electric Buses
Introduction to Electric
2 Introduction Buses Buses
to Electric
Road-based transport contributes about 87% of the total transport emissions11
which includes carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O),
and pollutants such as carbon monoxide (CO), Non-Methane Volatile Organic
Compounds (NMVOCS), Sulphur dioxide (SO2), PM and oxides of nitrate (NOx)12.
On-road diesel vehicles were responsible for nearly half of the health impacts of
air pollution from vehicles worldwide in 2015, and two-thirds of impacts in
India13.

Studies suggests that the most vulnerable population, including children, the
elderly are exposed to higher levels of pollution14. Cities well serviced by public
transport tend to have lower per capita emissions improving air quality and
overall public health15.

Indian cities have been witnessing a constant deterioration in air quality. To

make the situation worse, the number of cars and two-wheelers have been
continuously increasing over the years. As a way out of this gridlock, electric
buses can play a significant role, as they offer several benefits over
conventional diesel buses in terms of reduction in local pollution, noise, and
fuel cost. However, despite the many positive benefits related to electric bus
technology, certain challenges remain. Most State Transport Undertakings (STUs)
— the agencies responsible for public bus operations in India, lack the technical
knowledge to procure, deploy, and manage their e-bus fleet optimally.

This report aims to evaluate the existing electric bus technologies in India and
their performance through the pilots undertaken by STUs across the country.

11. Sharma, S., et al. "India-California Air Pollution Mitigation Program (ICAMP)." (2013).
12. Task Force on National Greenhouse Gas Inventories of the Intergovernmental Panel on Climate
Change (IPCC), 2006
13. A global snapshot of the air pollution-related health impacts of transportation sector emissions in
2010 and 2015, ICCT
14. Holgate ST. 'Every breath we take: the lifelong impact of air pollution - a call for action. Clin Med
(Lond). 2017;17(1):8‐12. doi:10.7861/clinmedicine.17-1-8; The toxic school run, UNICEF, 2018; Air
pollution and child health: prescribing clean air, WHO, 2018
15. CSE – Urban Commute (Reference only if necessary)

Status of Electric Buses in India 12

 2.1 Electric Bus Technology

2.1.1 Engine technology

Electric buses are powered by the energy stored in rechargeable batteries rather
than fossil fuels. Instead of internal combustion engines, they are propelled by
electric motors — hence have fewer moving parts than a conventional bus. This
helps in reducing the cost of maintenance and maintaining the structural
integrity of the bus for more years. Electric buses also have regenerative braking
that charges the battery on braking and hence helps in increasing the range of
the buses.

2.1.2 Battery
Most electric buses across the world use advanced Lithium-Ion batteries as they
can handle high voltage, and have a good cycle life. Most buses in India have
batteries with capacities ranging between 200-300 kWh. A 12m bus with a 300
kWh battery is rated to operate up to 250 km per charge with air conditioning
turned on. This allows transit agencies to run electric buses on schedules
similar to their diesel counterparts. However, it’s not all rosy in the
electrification segment.

The cost of an electric bus lies in its battery. Big battery packs increase the cost
of the bus significantly. Even with a steady decline in the price over the last few
years, lithium-ion batteries cost ₹11,000 - ₹15,000 ($150 - $200) per kWh16. As of
2019, a 12m electric bus in India with a 300 KwH battery costs around ₹2.5 crores
($320k) as compared to ₹55 lakhs ($70k) for a diesel counterpart.

Having big battery packs also increases the weight of the bus — reducing its
efficiency and eating up precious space for onboard use. To reduce the
procurement cost and increase passenger capacity, many bus manufacturers
have devised innovative ways to deliver electric buses with small battery packs,
opportunity charging and battery swapping. Buses with opportunity charging —
a system that permits batteries to be charged several times during the work
cycle; tend to have battery packs with a capacity of 50-200 kWh.

16. Zero Emission Vehicles (ZEVs): Towards a Policy Framework. NITI Aayog. (2018)

Status of Electric Buses in India 13

2.1.3 Battery Technology
Batteries have been the major energy source for EVs for a long time. Different
battery technologies have been invented and adopted for different uses. The
most important criteria are to have high energy density and high power density.
High specific energy is required from a source to provide a long driving range
whereas high specific power helps to increase the acceleration.

Batteries used in EVs consist of several electrochemical cells that are coupled in
parallel and in series to form a battery with a specific voltage and capacity.
Batteries age over time as a result of multiple charging and discharging cycles.
The aging of a battery causes a higher internal resistance and a loss of storage
capacity. A battery is deemed not suitable for EV/bus application if the
remaining storage capacity is 80 % of the initial capacity typically by the eighth
year17.

2.1.4 Battery Chemistry

Three battery chemistries are dominant in e-buses - lithium titanium oxide
(LTO), lithium nickel manganese cobalt oxide (NMC) and lithium iron phosphate
(LFP) are the most common cell types encountered in E-buses.
LTO permits the highest charging power of all technologies, however,
owing to its comparatively low energy density, it has the lowest capacity.
LTO is only applicable in opportunity-charging systems. These have been
widely used in the USA.

NMC enables the largest capacity as well as high charging power and
therefore lends itself both to AC and DC. These have been widely used in
Europe.

LFP has a lower C-rate for charging and requires typically bigger batteries
for a long driving range. These have been widely used in China, South
East Asia etc.

Figure 5: Capacity and Charging Power of different battery chemistry18

17. Battery Capacity Needed to Power Electric Vehicles in India from 2020 to 2035, ICCT, 2021
18. Göhlich, Dietmar & Fay, Tu-Anh & Jefferies, Dominic & Lauth, Enrico & Kunith, Alexander & Zhang,
Xudong. (2018). Design of urban E-bus systems. Design Science. 4. 10.1017/dsj.2018.10.

Status of Electric Buses in India 14

2.1.5 Types of batteries

Lead-acid batteries

Lead-acid batteries have been in use since the mid-nineteenth century. They
use lead electrodes and sulphuric acid to create a flow of electrical energy to
the device.

1. Long service life.

2. Cheap to produce.
Advantages 3. Low long-term self-discharge
4. Capable of a high discharge rate

1. Unsafe as they produce dangerous

gases when in use
2. Overcharging can lead to explosion or
fire hazards.
3. They have a lower energy density19
4. Their service life shortens when used
Limitations
with full discharge / deep discharge
cycles
5. Reserve battery has to be maintained,
which reduces the effective capacity.
6. Not environmentally friendly due to
lead and acid contents
7. Transportation of batteries is a
challenging task due to the possibility
of acid spillage.

19. Energy density of a battery determines how much energy the battery can store. The energy density is
usually expressed in terms of weight (Watt-Hour/Kg) or volume (Watt-Hour/liter)

Status of Electric Buses in India 15

 Nickel metal hydride batteries

This battery technology uses a Nickel-hydroxide cathode and anode made up of

hydrogen-absorbing alloys. Potassium-hydroxide is used as an electrolyte. This
battery technology uses a Nickel-hydroxide cathode and anode made up of
hydrogen-absorbing alloys.

1. Considered to be safer than lead-acid

batteries.
2. Higher energy density than lead-acid
batteries
Advantages
3. Possibility of deep discharge is possible.
4. Long shelf life
5. Higher number of life cycles as
compared to lead-acid batteries

1. They display a memory effect20

2. High long-term self-discharge rate
3. Overcharging can damage the battery
4. Lower cell voltage than Lithium-ion
Limitations batteries
5. Lower service life, deep discharges
reduce the service life.
6. NiMH batteries contain relatively toxic
materials.

20. Memory effect is the reduction of battery capacity due to consistent recharge events without complete
discharge of the battery.

Status of Electric Buses in India 16

 Lithium-ion batteries:

These batteries are best suited for electric buses. The anode is made of
graphite, and the cathode is typically made from one of these materials:

-Li-Iron-Phosphate (MFP)
-Li-Metal-Polymer (LMP)
-Lithium Nickel Manganese Cobalt Oxide (NMC)
-Lithium Titanate Oxide (LTO)

1. Better energy density than other

batteries
2. Safer than other batteries
3. A battery management system (BMS)
that controls the rate of charge and
discharge to optimise the battery
Advantages efficiency and avoid overheating and
overcharging
4. No memory effect, hence low
maintenance
5. Relatively lower self-discharge (less
than 50% of the NiMH battery)
6. Capable of providing high power output.

1. Comparatively expensive to produce as

technology is still developing
2. Li-ion batteries have not resolved
Limitations
recycling and disposal problems.
3. These batteries age even when unused.

Status of Electric Buses in India 17

 2.2 Charging Technology

2.2.1 Conductive Charging

Electricity transfer through conduction requires direct contact between the two
surfaces. Hence, conductive charging is done primarily through plugs that are
required to be connected to an electric vehicle. Depot charging and opportunity
charging are the two most commonly-used strategies for charging electric buses
using conductive chargers.

Depot Charging: As the name suggests, depot charging requires buses to be

parked in the depot to be charged during their off time. This could be done
either at night or day depending on the operations plan and prevailing
electricity tariffs.

Plug-in charging is the most commonly used technology for depot charging.
There are usually two main parts - a Power Control System (PCS) and a
charging dispenser. Depending on its size and capacity, a PCS can service
up to ten charging dispensers. In turn, each charging dispenser can charge
up to two buses.

Opportunity charging allows the buses to be charged quickly with the help
of superchargers, enabling them to charge at the end of a route, between
shifts or intermediate stops. This method of flash charging is a
comparatively new technology and has been instrumental in reducing
charging time and battery load on buses. Flash charging infrastructure
provides a burst of electric current to the battery, which increases the
charging rate. As conventional chargers have a lower rated voltage, they do
not impose a burden on the grid. But flash charging draws a very high
voltage in a short time frame which puts a heavy load on the grid.

Pantographs are generally used for opportunity charging. They are usually
attached to poles at the passenger bus stops. A pantograph descends and
connects to the roof of the bus and recharges the battery. In some cases,
the pantographs are on the roof of the bus, and they rise to connect to the
pole. In case of opportunity charging, they are used at the route end bus
stops, where it can take several minutes to charge the battery. Whereas in
flash charging, they are used at the selected intermediate bus stops. The
minimum voltage associated with pantograph systems is 415 V.

A smaller battery can reduce the load on the electric bus. The battery can
be charged overnight at the depot and supplemented by top-ups using
opportunity charging at route ends or some selected passenger stops.

Status of Electric Buses in India 18

2.2.2 Inductive Charging

Induction is the process of transfer of energy from one surface to the other
without direct contact. In electric vehicles, it is the process of charging
wirelessly. The minimum output voltage for inductive charging is 415 V.

Inductive charging requires minimal space for the charger, but an ancillary
infrastructure is needed. The cost of such equipment is high; hence it has not
been adopted in India so far.

2.2.3 Battery Swapping

Battery swapping involves the replacement of a depleted battery inside a bus
with a charged battery. Such a mechanism overcomes a significant disadvantage
of high in-depot time during charging of plug-in battery buses. Because of the
reduced in-depot time, it is comparable to diesel/CNG bus refuelling time. This
advantage, however, comes at the cost of a reduced range because the batteries
need to be smaller and lighter for the convenience of swapping.

Battery swapping is automated using robotic arms which is an additional

infrastructure over and above the battery chargers. This extra cost makes it less
attractive for adoption. Ahmedabad is the only Indian city to have piloted buses
with battery swapping.

2.2.4 Regenerative braking

Regenerative braking is the process by which energy produced during braking
can be used to recharge the batteries inside electric buses. In a conventional
braking system, brakes operate using brake pads which produce friction with the
brake rotors to slow the vehicle down. The friction produces heat; hence there is
a loss of energy.

An electric motor drives the bus forward. In a regenerative braking system, the
electric motor starts running backwards to slow the vehicle. It acts as an
electricity generator while in reverse mode. The electricity thus produced is
either routed to charge the battery or stored in capacitors to accelerate the
vehicle when needed. Braking using electric motors has its limitations, and
therefore conventional braking systems are also provided in most vehicles.

Status of Electric Buses in India 19

2.3 Charging Strategies

Many cities use more than one system of charging. Relying on depot charging
alone requires larger batteries, but provides freedom of operation. Larger
batteries increase deadweight on the bus and thus reduce passenger capacity.
They need slow chargers (typically 40 kW); hence ancillary equipment like
transformers, etc. are not required.

A combination of both depot charging and opportunity charging can help

increase the operating range of buses significantly by providing a trade-off
between range and dead weight.

Opportunity charging during layovers using fast chargers (150 kW) can provide a
top-up to match the ICE bus operating schedules. The third layer of opportunity
charging using flash chargers at intermediate passenger stops can provide the
much-needed top-up and help in reducing the size (and load) of the battery. A
smaller battery would also reduce the cost of the overall bus as the battery
forms a major chunk of the cost of the bus.

Status of Electric Buses in India 20

Source - Autofutures.tv

03
Electric Bus Experience
Around the World
3.1 Introduction
There are almost 600,000 e-buses on the road globally, representing 39% of new
sales and 16% of the global fleet. China accounted for the vast majority of all
e-bus sales in 2020, with over 74,000 units sold and continues to account for
98% of the global e-bus fleet21.

This share is projected to decrease as Chinese city bus fleets start to saturate
and adoption picks up in Europe, USA, South East Asia, India and South America.
It is expected that the number of e-buses is going to triple by 2025 from the
existing total of 5,000 in these geographies. This section, examines the electric
bus markets in China, Europe, and North America to understand the dynamics of
a growing electric bus market in India.

China

China’s battery-electric buses totalled 324,231 in 2019, accounting for around a

half of the bus fleet—becoming the mainstreamed bus technology. With more
than 16,000 electric buses in service, Shenzhen—a Chinese
megacity—transitioned to a fleet of 100% electric buses in less than ten years.
This was possible because of a strong market for electric buses. World’s biggest
electric bus manufacturers like BYD, Yutong, and Foton are all based in China.

Unlike other markets, Chinese Original Equipment Manufacturers (OEMs) benefit

from easy access to the latest battery technology. In fact, BYD, which is now
expanding across the world, started off making batteries for mobile phones in
the 90s.

Chinese OEMs have ventured into the manufacturing of double-decker and

articulated buses, increasing the options for operators. BYD unveiled a fully
electric double articulated bus. This allows Bus Rapid Transit systems across the
world to provide a more efficient, reliable service. Owing to the size of the
market and expertise gained in China, OEMs are now expanding to Africa,
Europe, and South Asia as well.

21. https://about.bnef.com/electric-vehicle-outlook/

Status of Electric Buses in India 22

 Source - Singularity HUb

Source - sustainable-bus.

Status of Electric Buses in India 23

 Europe

Volvo, Solaris and VDL have been at the forefront of developing hybrid and
electric buses in Europe. Most OEMs in Europe are offering buses with options of
both opportunity charging and depot charging. Additionally, Chinese
manufacturers like Yutong, and BYD have been working closely with ADL — an
OEM in the UK, to deliver their products. BYD, in partnership with ADL, has
recently delivered a fleet of fully electric double-decker buses in London.

Figure 6: Electric bus orders in Europe, 2009 to 201822

According to a recent publication from Interactive Research23, BYD and ADL are
market leaders in electric buses across Europe. The publication also states
many cities are moving away from the option of opportunity charging in favour
of overnight charging at depots mainly because BYD offers buses with only
overnight charging at depots.

Swiss company ABB has also introduced Trolleybus Optimisation Système

Alimentation (TOSA)24, a flash charge technology that enables buses to be
charged quickly. The system uses a combination of three chargers - overnight
slow charging at the depot (45 kW chargers), occasional fast charging at the
terminals (400 kW chargers) and intermediate flash charging (600 kW) at select
passenger stops.

Flash charging is capable of adding two to three kWh of energy to the battery in
just 15-20 seconds. The batteries also receive regenerative charging during
operation.

22. Compiled by UITP using data provided by Stefan Baguette, ADL Market Analyst and Product Manager.
23. https://www.sustainable-bus.com/news/650-electric-buses-delivered-in-europe-leader-vdl/
24. ABB power products (2016). Taking Charge. Flash-charging is just a ticket for clean transportation.

Status of Electric Buses in India 24

 TOSA - a full large capacity urban battery-electric bus system; uses a battery
pack between the grid and the bus charger to cushion the impact on the grid
when the power is drawn for charging. Inherently, battery packs in buses are
directly connected to the grid which charges using a charger of lower power
capacity. When a bus connects to the flash charger, the energy is drawn out of
the battery pack to charge the bus.

With more OEMs entering the market and cities drawing up plans to electrify the
buses, the market is only expected to grow.

Source - sustainable-bus. Milan

Status of Electric Buses in India 25

 North America

The electric bus market in the United States has expanded dramatically since
2014. There were a total of 650 fully electric battery-driven buses in service
across the country in 2020. Major cities in the US are committed to go
all-electric by 204525.

Often referred to as the “Tesla of Buses” by automobile enthusiasts, Proterra -

an American startup has been making waves by delivering electric buses and
coaches capable of ranges unheard of before. With light bodies and efficient
batteries, their buses can run up to 500 km on a single charge. Many cities like
New York and Washington DC have used federal funds to induct these buses into
their fleets to improve their level of service significantly.

New flyer, one of North America’s biggest bus makers, has also delivered
high-quality electric buses, now in use in cities across the US and Canada. Like
all other markets, BYD too has had a significant impact on the electric bus
market in North America. BYD is supplying 18m articulated buses for Bus Rapid
Transit networks in cities like Indianapolis and Albuquerque. Early deployers of
electric buses, however, have experienced a set of technological and economic
hurdles that will need to be overcome in future to bring electric buses to scale
quickly and deliver the promised benefits for public health and the
environment.

Source - sustainable-bus, New York

25. Electric Buses in America: Lessons from Cities Pioneering Clean Transportation, 2019. US Pirg
Education Fund, Environment America Research and Policy Center and Frontier Group

Status of Electric Buses in India 26

 3.2 Financing of Electric Buses Across the Globe
Electric buses are gradually expanding all over the world. Achieving a better
understanding of the financial mechanisms that enabled this growth is essential
to keep the momentum going. Currently, the costs of procuring e-buses are
twice to thrice of their ICE counterparts with the battery accounting for 50-60%
of the total cost. Given the high capital investment, robust financial mechanisms
are required to promote widespread adoption.

According to a study by Transport and Environment in 2018, the total cost of

ownership that includes external costs on health and climate (based on inputs
from CE Delft), showed that electric buses are cheaper than their diesel
equivalent. An overnight electric bus costs ₹88.45/km ($1.14/km), an opportunity
charging bus costs ₹87.61/km ($1.13/km), while a diesel bus costs ₹94.35/km
($1.21/km)26. If environmental and climate costs are removed, then e-buses are
still slightly more expensive than diesel buses. If subsidies are provided on
procurement, then the electric bus market can become quite lucrative for many
cities across the globe.

Figure 7: 8-year Total Cost of Ownership in 2018 in Europe27

26. Cost converted from Euro to Rupee at an exchange rate of ₹84.24 as of May 2020
27. Electric buses arriving on time: Marketplace, economic, technology, environmental and policy perspectives
for fully electric buses in the EU, 2018. Transport and Environment

Status of Electric Buses in India 27

 Case study : Electric buses in China

Similar to India, the electric bus market in China has been driven by subsidies
from the city, provincial, and the national government. For example, in
Shenzhen, subsidies from both provincial and national governments combined
were ₹1 Crore ($128k) per bus in 2016. Cost per bus was ₹ 60-80 lakh ($77k-103k)
after subsidy, based on the length of the bus. Aim of the governments is to bring
down the cost of an electric bus to that of their diesel counterparts.

According to a study conducted by the World Bank and the Global Environment
Facility, the lifecycle cost of e-buses in Shenzhen as of 2016 (including
procurement, energy and maintenance costs over eight years) is ₹2.92 crores
($375k), slightly higher than the diesel bus’ lifetime cost of ₹2.66 crores ($342k).
However, over the years, the subsidies have been reduced. The sale of electric
buses peaked in 2017 when there was an announcement to withdraw subsidies
starting in 2018.

According to a report by Interact Analysis28, the growth rate of electric bus sales
has stayed negative for four consecutive months beginning June 2018. However,
the market for electric buses in China is expected to stabilise and not crash
thanks to clean air mandates in many cities. The market has already shown
signs of recovery with orders at the end of the year. Cities have responded to
the reduction in subsidies by taking buses/batteries on lease from OEMs. This
has reduced the burden of high upfront costs and allowed cities to deliver
climate mandates.

Case study : Electric buses in Europe

In many cities in Europe, electric buses are procured up-front from existing
public budgets. Even where private operators purchase buses, public investment
incentives are provided to reduce the up-front cost. In Germany, for example,
the European Union Commission approved an increase of 300 million euros in
Germany’s state aid for the purchase of electric buses and charging
infrastructure under state aid law.

The total state funding for this now amounts to 650 million euros (~₹5,300
crores)29. The German government subsidies up to 80% of the additional costs in
the purchase of an electric bus compared to a diesel counterpart.

28. https://www.sustainable-bus.com/news/chinese-electric-bus-market-is-still-growing-but-the-subsides-switched/
29. https://www.electrive.com/2020/01/31/eu-commission-approves-electric-bus-funding-for-germany/

Status of Electric Buses in India 28

 Case study : Electric buses in USA
USA offers several federal, regional, and state grants and incentive programs to
support the expansion of electric buses. In 2018, the ‘Low or No Emissions Grant’
program awarded grants to over 50 state and local governments, totalling $84.5
million (equivalent to ₹590 crores).

The annual grant was solely for the purchase of electric buses and charging
equipment. Additionally, in 2017, 141 school districts across the country
received rebates from the program totalling $8.78 million (~₹68 crores). This
program has been used extensively to transition buses from diesel to
diesel-electric hybrids across the country30.

Source - PV Magazine USA

30. Paying for Electric Buses: Financing Tools for Cities and Agencies to Ditch Diesel, 2018. U.S. PIRG Education Fund

Status of Electric Buses in India 29

 Source - Deccan Herald

04
Operationalising
Electric Buses in India
30
4.1 Introduction
As of January 2022, there are more than 1,000 electric buses in service across
various cities in India. Additionally, the Department of Heavy Industries (DHI)
has sanctioned 5,595 e-buses to 64 STUs/public bus service providers. This
chapter looks at the story of electric buses in India till now.

The Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme

introduced in 2015 gave subsidies to support state transport corporation in
purchasing e-buses. The price of e-buses varies anywhere between 2-3 times of
their diesel counterparts. Since several state corporations were already facing
funding challenges and did not have budgets to make direct purchases, the
scheme had a slow uptake.

In addition, transit agencies lacked technical crew to maintain and operate the
electric buses. As a response, the second phase of FAME encouraged a 'Gross
Cost Contract' (GCC) of procuring e-buses as per which, instead of outright
purchases, state transport corporations simply paid original equipment
manufacturers or e-bus operators a per km cost for operations and
maintenance. This model removes the risk involved associated with new
technologies from the STUs and puts the onus of operating and maintaining
e-buses on the private player. Since then, of the 5,595 e- buses already
sanctioned under FAME II, more than 1000 e-buses are on the road.

4.2 E-bus Market in India

In India various OEMs have just begun to ramp up their production and R&D
facilities making the most of government schemes to promote electric mobility.
In Ahmedabad, Ashok Leyland had partnered with Sun Mobility to pilot battery
swapping on the BRT corridor in 2019, allowing buses to have smaller batteries
that can be changed at the end of the route. However as of early 2022, all the
original 50 battery swapping buses have been converted to operate with plug-in
charging owing to several issues. Ashok Leyland is currently operating 125 buses
(including the original battery swap buses which were later converted to plug-in
charging mode) along BRT corridors and airport express line. In total, 170
e-buses are plying along the BRT corridor in Ahmedabad. The remaining buses
are operated by AJL and use plug-in chargers.

There is a high court ruling to replace the diesel buses with CNG buses or
e-buses in 8 cities in Gujarat including Ahmedabad. There are 1,000 buses in
Ahmedabad that are operated by AMTS and it has been decided to replace these
with e-buses. Currently a plan to procure 150 additional e-buses is already
underway.

Status of Electric Buses in India 31

 At the same time, TATA was developing electric buses on its Starbus platform.
The OEM has supplied more than 200 e-buses to various cities including
Lucknow, Srinagar, and Kolkata under FAME-I. It has also bagged a contract to
supply 300 electric buses to Ahmedabad Janmarg Ltd under FAME-II31. KPIT, a
technology firm based out of Pune was among the first to create retrofitting kits
to convert diesel buses to electric. The company is now working with Eicher to
make efficient and affordable electric buses. A small fleet of their buses are
already in service in the suburbs of Kolkata.

Various Chinese and European OEMs have partnered with Indian companies to
deliver electric buses. These OEMs bring with them the experience of
successfully operating fleets of electric buses across the world. BYD - a Chinese
firm has partnered with Olectra to supply its highly successful K7 and K9
coaches in India. Olectra-BYD has set up manufacturing plants in Tamil Nadu
and Telangana where they build battery packs and buses. Olectra had supplied
the first fleet of e-buses in India to Himachal Pradesh. It is currently operating
over 600 e-buses in India and has orders of more than 1500 e-buses from
various STUs.

Foton, a Chinese OEM is working with its Indian partner PMI to deliver
high-quality 12-meter buses with plug-in charging. It has participated in the
most tenders floated across the country under FAME-II and is planning to set up
a manufacturing facility in Pune. Meanwhile, Solaris, a European OEM, has
partnered with JBM to deliver India’s first bus with opportunity charging. Their
bus - ECOLIFE can run up to 200km on a single charge. Delhi Transport
Corporation has recently tested one of its buses successfully. JBM Solaris set up
a manufacturing facility in Uttar Pradesh, prepared for the ever growing electric
bus market in India.

4.3 Financing of Buses in India

One of the significant barriers preventing the uptake of electric buses is their
high upfront cost. Batteries alone account for 50% of the cost of an electric bus.
With the government of India reducing import duties on Lithium-ion cells and
encouraging manufacture of battery packs in India, the cost of electric buses is
set to come down. The trend has been similar internationally as well, with
battery costs coming down from ₹50,000/kWh ($1100/kWh) in 2010 to
₹10,000/kWh ($137/kWh) in 202032.

31. https://www.financialexpress.com/auto/car-news/tata-motors-bags-order-for-300-electric-buses-to-be-
deployed-at-ahmedabads-brts-corridor/1726825/
32. .https://about.bnef.com/blog/battery-pack-prices-cited-below-100-kwh-for-the-first-time-in-2020
-while-market-average-sits-at-137-kwh/

Status of Electric Buses in India 32

 For most State Transport Undertakings (STUs), farebox is the only source of
revenue. It is evident from reports published by MoRTH that there is a
significant difference in earnings and expenditure with most STUs running in
losses. While STUs must be held accountable to reduce the gap between
revenue and expenditure, state and city governments must chip in with enough
financial aid to help STUs invest in better buses.

4.3.1 FAME-I
One of the stated objectives of FAME scheme was to “provide affordable and
environmental friendly public and private transportation/vehicular mobility
options for the masses”. However, as the performance of the initial phase of the
scheme shows, the focus was very much on boosting consumer demand,
industry development and sales. In fact, until mid 2017, the FAME scheme did
not include an incentive structure for fully Electric buses, it was included in the
FAME-I scheme only after mid 2017.

Source - financial express

Status of Electric Buses in India 33

 Case study : Electric buses in Himachal Pradesh

Following directions issued by the National Green Tribunal (NGT), Himachal

Pradesh Road Transport Corporation (HRTC) proposed to operate electric buses
from Manali to Rohtang. At that time, no OEM in India was manufacturing fully
electric buses that could navigate the harsh terrain in Manali.

HRTC worked closely with DHI and industry partners like Association of State
Road Transport Undertaking (ASRTU), Central Institute of Road Transport (CIRT)
and Society of Indian Automobile Manufacturers (SIAM) to prepare and issue an
RFP to procure 25 electric buses in May 2016.

Only Ashok Leyland and Goldstone (now Olectra) bid to supply buses after going
through a tendering process. Following this, both OEMs conducted trial runs of
their buses in December 2016. While BYD buses managed to reach Rohtang from
Manali on a single charge, Ashok Leyland buses were not successful in doing so.
BYD won the order after negotiating to reduce the price per bus to 1.9 crores
($244k).

It is important to note that DHI took up this project as a pilot in the absence of
guidelines to fund electric buses. The RFP too, included clauses for Annual
Maintenance Cost (AMC) and a trial run given the technology had not been
tested. The centre and state shared 75% and 25% equity respectively to finance
these electric buses.

On September 23, 2017, India’s first fleet of 25 electric buses was launched in
Manali. These 9m non-ac buses can run up to 230 km in a single charge that
could take about 4 hours to fill up the battery.

Buoyed by the success, Himachal Pradesh government introduced 50 more

electric buses at Shimla in February 201933. These buses received subsidy under
FAME-I. PMI Foton, a Chinese company has supplied 30 seater buses capable of a
150 km range. Foton claims batteries can be charged in 30 minutes using fast
chargers installed at various bus depots and terminals.

33. https://swachhindia.ndtv.com/queen-of-hills-gets-fifty-electric-buses-himachal-pradesh-
flags-off-its-third-electric-vehicle-project-31278/

Status of Electric Buses in India 34

 Growing interest from both public and private bus operators led to a belated
push for the inclusion of public transport under the FAME-I scheme. DHI issued
an Expression of Interest (EoI) in October 2017 – after the scheme was extended
– for the rollout of shared, multimodal transport, consisting of modes such as
buses, three-wheelers and even cars.

The rollout planned to cover a minimum of 5 cities with a population above one
million, with a grant of up to ₹105 crores ($1.35m) per city. DHI received 47
proposals from 44 cities spread across 21 states. However, most proposals,
especially from metropolitan cities, included only buses. The selection
committee in DHI limited the number of buses to 40 per city with an additional
fund of ₹4 crores ($514k) for setting up charging infrastructure. Following the
evaluation, a list of 11 cities was published and guidelines issued for
procurement.

DHI had initially sanctioned 40 buses each for Delhi, Mumbai, Kolkata,
Bengaluru, Hyderabad, Ahmedabad, Jaipur, Lucknow and Indore, while hilly
cities of Guwahati and Jammu were sanctioned 15 buses each. However, with
Delhi opting out of the scheme, its quota was allocated to Bengaluru. With a
total outlay of ₹ 895 Crores ($115m), these 11 cities were sanctioned subsidies for
390 e-buses.

DHI benchmarked the prices of electric buses after analysing the rates received
by various STUs. According to a notification published by DHI34 in 2018, the
indicative benchmark price for a 12m AC bus with 320 kWh battery is ₹1.75 cr
($225k), and a 9m non AC bus with 125 kWH battery costs Rs ₹75 lakhs ($96k). It is
important to note that these are indicative prices and they can change based on
the conditions in Request for Proposal (RfP).

In the first phase of FAME scheme, DHI offered demand incentive at 60% of
purchase cost or ₹1 crore ($128k), whichever is less, for buses that achieved 35%
localisation and 60% of purchase cost or ₹85 lakhs ($109k), whichever is less, for
buses that achieved 15% localization.

Deployment of electric buses in India started through the Fame-I scheme.

Several pilots were initiated across different cities. These pilots varied between
15-40 buses across 12 cities in India. Most of the buses deployed were 9m buses.

34. https://dhi.nic.in/writereaddata/UploadFile/Benchmark%20price%20for%20Electric
%20Buses636662995963975616.pdf

Status of Electric Buses in India 35

 DHI allowed cities to choose the method of procurement from two options,
outright purchase or through GCC. For outright purchase, DHI provided 60%
subsidy, and the rest was to be borne by the State governments or STUs. Under
GCC, the buses would be operated and maintained by the supplier at a fixed
cost per km. Operators would receive a subsidy of up to 60% of the cost of
Electric Bus over three years in installments of 20% each.

Five cities (Bangalore, Mumbai, Hyderabad, Ahmedabad, and Jaipur) invited bids
under GCC, and the rest (Indore, Lucknow, Kolkata, Jammu and Guwahati) went
ahead with the outright purchase of buses.

Tender conditions across cities were utterly different, leading to a considerable

variation in price for both GCC and outright purchase models. While some cities
asked for 9m buses, others chose a mix of 12m standard size buses and 9m
buses in AC and non-AC variants.

A vast difference was also noticed in terms of the range requirements (assured
km per day) for cities. Kolkata, for example, had one of the lowest requirements
at 150km/day while Hyderabad asked for 225 km/day. The tender documents
also revealed that some cities pushed the cost of electricity onto the GCC
operators while others chose to pay for it themselves.

The rollout of buses has been slow in many states due to a variety of reasons.
Tenders have been cancelled in Bangalore, Mumbai, Ahmedabad, and Jaipur
while buses have been pressed into service in the rest. It is important to note
that cities that chose to get buses under GCC have cancelled tenders due to
varied reasons.

In Bangalore, news reports suggested the state government preferred outright

purchase of buses whereas, in Mumbai, BEST cancelled tenders after receiving
better rates from a new bidder. Bombay High Court quashed termination of
contract notice for 40 midi-buses issued by BEST, after the operator- Olectra
BYD appealed to the court35.

Though few of the originally eligible cities did not succeed in securing buses
with subsidy, Table 1 summarizes the cities where buses were deployed using
subsidy under FAME-I.

35. https://indiankanoon.org/doc/130079118/

Status of Electric Buses in India 36

 Table 1: Deployment of Electric Buses under FAME I36

S.no. City Number of Buses Size

1 Guwahati 15 9m

2 Jammu 40 9m

3 Manali 25 9m

4 Navi Mumbai 30 9m

5 Lucknow 40 9m

6 Indore 40 9m

7 Hyderabad 40 12m

8 Mumbai 65 9m & 12m

9 Shimla 50 9m

10 Kolkata 80 9m & 12m

Total 425

Source - DHI, GoI

This kind of deployment across multiple cities helped in getting a better

understanding of electric buses in India. The dominant business model under
the Fame-I scheme was outright purchase with subsidies from Government of
India. However, the buses were very expensive compared to diesel buses and
hence transit agencies were not in favor of deploying electric buses.

Case study : Electric buses in Hyderabad

Telangana State Road Transport Corporation (TSRTC) participated in the EoI

issued by DHI and was shortlisted to receive demand incentive for 40 buses
along with ten other cities as explained already.

TSRTC chose to procure buses under GCC, given the high up-front cost and lack
of technical know-how on maintenance. Also, TSRTC operates a fleet of 3800 city
buses in Hyderabad, and about 500 of these buses are hired in a crude form of
GCC. This experience allowed TSRTC to choose GCC over the outright purchase.

36. https://pqars.nic.in/annex/252/AU89.pdf

Status of Electric Buses in India 37

 After a quick tendering process, TSRTC received bids from TATA, Olectra BYD, and
Mytrah NN4 energy. Bids varied between ₹40 ($0.51) and ₹60 ($0.77) per km for
both 9m, 12m buses37 and Olectra BYD bid the least for both models. TSRTC
negotiated with Olectra BYD and agreed to pay ₹33/km ($0.42/km). At this
juncture, it is essential to note that DHI had benchmarked the price of a 12m bus
at ₹1.69 crore ($217k)) and these buses were eligible to receive an incentive of ₹ 1
crore($128k) a piece. Perhaps this helped Olectra BYD reduce the asking price per
km to ₹33/km ($0.42/km) from ₹40/km ($0.51/km).

TSRTC received the first lot of buses in January 2019 following which it started
extensive trials of the buses on proposed routes. As per initial plans, buses were
to operate on four different routes starting from different parts of the city leading
to the airport. TSRTC chose the airport routes to minimize cost and maximise
earnings, given these routes have no conductors and the fare is higher than
regular city buses. Trials were successful with about 90 drivers receiving extensive
training on the routes, buses, and charging infrastructure.

To minimize dead kilometres, two depots were chosen. Each depot has ten
charging stations capable of charging 20 buses overnight. These buses are
equipped with 324 kWh batteries that can deliver 250 km range on a single
charge. However, TSRTC is using the fleet extensively with vehicle utilization
varying between 350 km-450 km per day.

While buses are charged at depots

overnight between 12 am, and 4 am, the
additional range is achieved by giving
the buses a quick top-up between
schedules in the afternoon. TSRTC is
spending ₹7/km ($0.09/km) on
electricity bringing the cost of operation
to ₹40/km ($0.51/km).

Since their launch in March 2020,

electric buses have seen a steady rise in
ridership, earning about ₹40/km
($0.51/km) most days.

Source - swachhindia.ndtv.com

37. https://india.uitp.org/news/electric-buses-procurement-indian-cities-got-the-viable-rates

Status of Electric Buses in India 38

 Case study : Electric buses in Kolkata
As compared to other metropolitan cities, Kolkata records the highest amount of
PM and NOX emissions per 1,00,000 vehicles, despite having lesser number of
on-road vehicles. This is primarily due to operations of older vehicles in the
citys38. In Kolkata, 33% of PM emissions from the transport sector are owed to
buses, and 50% of NOX emissions stem from transport. The Government of West
Bengal has adopted multiple measures to catalyze electric mobility in the city
and the state – especially as Kolkata’s air quality has been found to deteriorate
to “poor” levels during the winter season.

One such measure is 100% electrification of bus-based public transport by 2030,

led by West Bengal Transport Corporation (WBTC). WBTC operates 1,553 diesel
buses on 348 routes, of which ~40% are long-distance routes (greater than or
equal to 20 km).

In February 2019, WBTC procured 80 electric buses under Phase – I of the FAME
scheme, thereby electrifying nearly 5% of its bus fleet. The fleet included 40 9m
e-buses and 40 12m e-buses from Tata Motors Limited. These buses were
deployed along 12 routes. However, full passenger loading was found to
decrease the range of an electric bus by nearly 30%, from 130 km to 100 km per
charge, which is significantly higher than estimated (~8%). The total
development cost of charging infrastructure for 9 DCFCs, with each charger
costing ₹14.86 lacs($19k) and 61 DCSCs, with each charger costing ₹9.02
lacs($12k) has been around ₹12 Crores ($ 1.5 million), including civil and
electrical works.

Operating costs of electric buses (₹22/km or $0.28/km) being one-third those of

diesel buses, were a major factor in driving their adoption forward, in addition
to the purchase cost subsidy offered under FAME-I. When the declining costs of
lithium-ion batteries in the global market are factored in, electric buses become
even more financially attractive, especially as the cost of battery replacement is
also reduced.

WBTC preferred the electric buses outright during its first procurement, as it
aimed to leverage its existing public transport operations infrastructure,
manpower and experience. In Kolkata, electric buses were being charged
irrespective of load demand variations through the day. Hence, WBTC
anticipates that city-level peak power requirement might surge if a large
fraction of its fleet is converted to electric. To mitigate the same, it aims to
explore smart charging opportunities and support the implementation of
time-of-day or time-of-use tariff schemes.

38. TERI. 2020 Successful Operation of Electric Bus Fleet – “A Case Study of Kolkata”

Status of Electric Buses in India 39

4.3.3 FAME-II
Government of India approved Phase-II of FAME India Scheme, for three years
commencing from 1st April 2019 with total budgetary support of ₹ 10,000 Crore
($1.3 billions). Unlike phase one of the scheme, the main focus of this phase is
the electrification of public & shared transportation. The incentives are only
being offered for e-bus procurement on GCC basis.

The quantum of incentive is being decided based on the battery capacity at

₹20,000 ($250) per kWh of battery capacity. The maximum ex-factory price of the
e-buses has been capped at ₹2 Crores ($257k), and the maximum incentive has
been fixed at 40% of the ex-factory price or ₹50 lacs ($64k), whichever is lower.
Through this scheme, DHI intends to support a maximum of 7,090 e-buses, with
a total outlay of about ₹3,500 Crores ($450 millions).

In June 2019, DHI issued an Expression of Interest (EoI)39 inviting proposals from
State Transport Undertakings, and Municipal Corporations interested in the
deployment of electric buses for public transport in different cities under GCC
model. The incentives offered for e-buses were also explicitly stated in this EoI,
and the maximum incentive was increased to ₹55 lakh ($71k). DHI intended to
support five of the seven cities with a population of more than four million
according to census 2011, 20 million-plus cities, 20 smart cities and ten cities
from states with special category status (states with geographical disadvantage,
large tribal population etc.).
Table 2: Selection criteria for electric buses (Source: DHI)

Minimum no. of Total no. of No. of cities to No. of buses planned

Category of City
buses target Cities be selected to be sanctioned

Four Million plus cities 300 8 5 1500

One Million plus cities 100 45 20 2000
Cities in states with
50 20 10 500
special category status
Other cities 50 50 20 1000
Total 500 123 55 5000

As specified in the EoI, cities need to guarantee that each bus will run for at
least five lakh km during its contract period. Cities also need to inform the
number of buses they intend to deploy at the time of submitting the proposal.
The EoI allows STU/City to mix the bidding for the specified number of intra-city
operations and a certain number of inter-city operations for a better price on a
GCC basis.

39. https://dhi.nic.in/writereaddata/UploadFile/Final%20EOI%2004%20June%202019%20Published.pdf

Status of Electric Buses in India 40

 Selection criteria encourage cities and states to formulate progressive policies
to drive the adoption of EVs. Some of the most important criteria for selection
are- separate EV policy for the state and waiver of registration charges/road tax
for EVs.

While the EoI states incentives are calculated based on the capacity of the
battery, demand incentive for buses has seen a significant drop from phase one
of the scheme. For example, while the buses received a subsidy of up to ₹1 crore
($128k) in phase one, the maximum demand incentive available from DHI under
phase two has been capped at ₹55 lakhs ($71k) per bus. The EoI also capped the
incentive according to the size of the bus:

● Standard Bus (length > 10 m to 12 m): ₹55 Lakhs ($71k)

● Midi Bus (length > 8 m to 10 m ): ₹45 Lakhs ($58k)
● Mini Bus (length > 6 m to 8 m): ₹35 Lakhs ($45k)

In 2019, Government of India amended the FAME scheme and mandated bus
agencies to adopt the Gross Cost Contract (GCC) model for procuring e-buses,
making it easier to procure electric buses without the burden of capital
expenditure. Since states like Gujarat and Maharashtra were already
experienced in this model, they have been able to deploy more electric buses
when compared to other states.

The procedure followed was that bids were invited for deploying a defined
number of electric buses by transit agencies. Pre-bid meetings were held with
interested parties (Original Equipment Manufacturer OEMs/operators) to clarify
any questions related to the Request for Proposal (RfP) document.

A consortium of operators and OEMs meeting the criteria listed by transit

agencies submit both the technical and financial bids. The technical bid is
evaluated by a committee set up by the transit authority followed by financial
bids. The lowest bidder is selected and is invited for holding discussions for
further negotiation. Following this financial closure is achieved and the contract
awarded.

In some cases, the technical bids are evaluated, and shortlisted bidders are
required to deploy an electric bus for a month (prototype) before the financial
bids are evaluated. Successful deployment of an electric bus does not
guarantee that the contract would be awarded.

Bidders who are not able to successfully complete or participate in the trial run
automatically get disqualified for the next round. Following this, financial bids
are evaluated, and rest of the process is same as discussed in the earlier
section.

Status of Electric Buses in India 41

 The EoI received a tremendous response with 86 proposals from 26 States/UTs
for the deployment of 14,988 e-buses. After evaluation of these proposals as per
EoI, the Government sanctioned 5095 electric buses to 64 Cities / State Transport
Corporations for intra-city operation; 400 electric buses for inter-city operation
and 100 e-buses for last-mile connectivity to Delhi Metro Rail Corporation
(DMRC)40. DHI considered Maharashtra for the highest number of e-buses (725),
followed by Uttar Pradesh (600), Gujarat (550) and Tamil Nadu (525). Other states
were considered for a sanction of less than 500 electric buses.

DHI had given a deadline of March 2020 for the cities/STUs which had to be
followed to be eligible for the incentive. Many cities complied and started the
tendering process on time. Many electric-bus suppliers however quoted
significantly higher prices41 than during FAME-I scheme as shown below.
Table 3: Tender rates for procurement, operation and maintenance of
electric buses under FAME II

Type of bus Lowest bid Highest bid Median

received received
9m AC ₹54.82 ($0.283) ₹75.00 ($0.964) ₹64.06 ($0.823)

12m AC ₹53.70 ($0.690) ₹90.90 ($1.168) ₹74.95 ($0.963)

Source - Rediff

40. https://dhi.nic.in/writereaddata/UploadFile/Press%20Release%20Final.pdf
41 https://www.electrive.com/2020/01/31/eu-commission-approves-electric-bus-funding-for-germany/

Status of Electric Buses in India 42

 Table 4: List of buses deployed/supply order issued/extension to issue supply order given
under FAME-II Scheme as on December, 202142

S.No. City / SRTU Fleet Size

1 Ahmedabad 90
2 BEST Mumbai 314
3 Bangalore 600
4 Chandigarh 91
5 Delhi 325
6 Navi Mumbai 200
7 Other UP Cities 105
8 Patna 25
9 Rajkot 116
10 Silvassa 10
11 Surat 199
12 Tirupati 200
13 Uttarakhand 10
14 Gujarat SRTC 150
15 Kadamba SRTU (Goa) 230
16 Karnataka SRTC 50
17 Maharashtra SRTC 200
18 North Western Karnataka SRTC 50
Total 2965

However, the process of bus procurement was delayed due to COVID-19

pandemic and other reasons, and many cities might were able to utilize FAME-II
assistance, as a whole. DHI, therefore, decided to reallocate the subsidy for
2,000 electric buses through a fresh EoI43. They have also extended the second
phase of FAME-II until 31st March 2024 to give more opportunity to cities to
utilize the subsidies.

Additionally, Convergence Energy Services Ltd (CESL), an arm of state owned

Energy Efficiency Services Ltd was tasked to aggregate the demand of the 9
cities with more than 4 million population, for the remaining demand under the
scheme on OPEX basis. CESL had rolled out a tender for 5,450 buses worth
₹5,500 crores ($706 millions) to seek bids for the e-bus operation in 5 cities. Tata
Motors has emerged as the lowest bidder across all five operational categories.
Because of the mass tender, the bid received were of less than ₹50/km
($0.64/km) for 12m buses.

42. Year-End- Review of Ministry of Heavy Industries – 2021.https://pib.gov.in/PressReleasePage.aspx?PRID=1784161

43. https://auto.economictimes.indiatimes.com/news/commercial-vehicle/mhcv/subsidy-for-2000-e-buses-
to-be-reallocated-centre-to-invite-bids-next-month/73508634

Status of Electric Buses in India 43

 Table 5: Per km rates quoted by lowest bidder Tata Motors

Bus Type Cost / km

12m Low floor AC ₹47.49 ($0.610)

12m Low floor Non-AC ₹43.49 ($0.559)

12m Standard AC ₹44.99 ($0.578)

9m Standard AC ₹41.45 ($0.533)

9m Standard Non-AC ₹39.21 ($0.504)

Case study: Bengaluru

Bengaluru Metropolitan Transport Corporation (BMTC) has attempted to induct

electric buses into its fleet for the past five years. It was the first city in the country
to pilot electric buses operations in 2016.

BMTC has floated eight electric bus tenders till date, of which six were
unsuccessful, owing to either presence of a single bidder or high quotes from
bidders, both stemming from risk perceptions. It floated five tenders for
procurement of 300 units of standard size (12m) electric buses and three tenders
for procurement of 90 units of midi size (9m) electric buses, with successful
tendering happening only in 2021.

In August 2021, BMTC procured 90, 9m electric buses from JBM Group at the rate of
₹51/km ($0.655/km) through the GCC model, with subsidies provided under the
scope of the Smart Cities Mission by Bengaluru Smart City Limited.

In November 2021, BMTC awarded a procurement contract of 300 12m electric

buses to Ashok Leyland at the rate of ₹48.95/km ($0.629/km) , with subsidies from
Phase – II of the FAME scheme and Government of Karnataka.

For electrifying bus routes, the depot identification process must consider the
power infrastructure surrounding it. The best strategy is to select depots as close
as possible to electrical substations (which have power capacity available to
support requisite level of electric bus charging). This is important as the cost of
drawing an 11 kV line extends up to ₹1 crore/km ($128,000/km) for the state transit
agency. Here, a fine balance between locating close to substations and being closer
to route terminals must be struck.

Status of Electric Buses in India 44

 Certain clauses in electric bus tenders, such as 12-year concession periods in
place of 10-year concession periods, and staggered release of subsidy bank
guarantee, can play a role in limiting procurement costs. It is important to clarify
the tender as far as possible and limit unnecessary risks for bidders - in order
to get lower quotes and increase the bankability of the project. It is important
to maximize bid participation by intensive pre-bid meetings with multiple
bidders, understanding bidders’ perspectives, relaxing high battery capacity and
driving range requirements, allowing for opportunity charging during off-peak
hours of operation among others.

Case study: Delhi

The focus on electric buses emerged as part of a larger conversation to limit
transport sector emissions in the national capital. The Delhi Electric Vehicle
Policy (launched in 2020) specified for the transit agencies in Delhi to procure
1,000 electric buses by the end of 2020. In 2021, the Delhi Transport Corporation
(DTC) procured 300 electric buses under Phase – II of the FAME scheme. The
details of the buses, which are supplied by two manufacturers and set to be
delivered in the first quarter of 2022, are 100 buses from Tata Motors Limited at
the rate of ₹72.20/km ($0.93/km) and 200 buses from JBM group at the rate of
rate of ₹68.58/km ($0.88/km).

In Delhi, provision of power of the order needed for electric bus operations (>4
MVA) is proving to be a challenging task. Hence, the transit agencies in Delhi
have prioritized their depots for commencing electric bus operation in coming
years, based on the timelines communicated to them by relevant power
distribution companies - for provision of a required level of power connection
(if possible).

An analysis of Delhi’s routes indicated to the Delhi Transport Corporation (DTC)

that it is not feasible to deploy electric buses in the same way as conventional
fuel buses. This could result in requirement of additional fleet or downtime for
charging. Hence, DTC is contemplating on carrying out a system-wide route
analysis, the pertinent results of which can feature in the tenders as tentative
information to bidders for electric bus deployment. The same may help bidders
to be more precise in quoting their rates, and help DTC avoid any operational
and performance-related challenges.

As per DTC’s understanding, the rest times’ provisions in the Motor Transport
Workers Act can be used to create top-up charging events for electric buses,
which may reduce the charging requirements for electric buses at depots,
thereby supporting operational feasibility.

Status of Electric Buses in India 45

 Case study: Mumbai

Between 2005 and 2017, the share of public transport in all passenger trips
made inside the Mumbai Metropolitan Region declined from 78% to 65%44. This
trend is accompanied by a twofold rise in private vehicle trips in the same
period.

The decline in share of public transport is credited to two main reasons:

extensive development of road links and low-capacity transit in Mumbai, as per
the Comprehensive Transport Study (2008), and; incapacitated public transport,
with Brihanmumbai Electric Supply and Transport (BEST) having only 3,500
buses. As part of its fleet electrification and augmentation plans, BEST has
added 386 electric buses by the end of 2021.

BEST has so for procured and deployed 386 electric buses under Phase – II of
the FAME scheme. These buses include buses from Tata Motors Limited at the
rate of ₹74/km ($0.95/km) and from JBM group at the rate of rate of ₹83/km
($1.07/km).

Mumbai has traditionally operated buses wherein they do not return to depots
during operating hours, and staff change occurs at the terminals. However, as
electric buses (in some cases) necessitate depot visits due to opportunity
charging needs – BEST is forced to change its operation style.

Lack of land space for depots and terminals is a challenge for expansion of
buses in Mumbai. BEST had to procure specially designed compact distribution
transformers which occupies 75% less area.

In 2021, BEST announced that it will be procuring additional 2,100 e-buses.

Furthermore, in Jan 2022, BEST announced that it will be procuring 900 double
decker e-buses to its fleet.

44. https://www.adb.org/sites/default/files/publication/710081/mumbai-metro-transforming-transport.pdf

Status of Electric Buses in India 46

4.3.2 Beyond FAME
Outside FAME-I and II EoI, many cities and state governments have shown
interest in procuring electric buses. Interestingly, many have chosen to procure
these buses under GCC model. Kerala State Road Transport Corporation (KSRTC)
procured ten 9m buses via GCC and operated them during the Sabarimala
festive season. Now, the transport utility is successfully operating the same
buses on popular intercity routes.

Pune’s public transport operator, PMPML procured 25 9m and 125 12m buses via
Smart Cities Mission. Other states too have issued RFPs for buses ranging from
10-500. However, the most important of them all is Delhi. With 10,00 buses, Delhi
is set to have the world's biggest electric bus fleet outside China. DIMTS, the SPV
that manages Cluster bus scheme in Delhi has already initiated the process to
procure 375 12m AC electric buses.

Case study : Electric buses in Pune

Pune Mahanagar Parivahan Mahamandal Limited (PMPML) operates over 2,200

buses45 across Pune and Pimpri Chinchwad both in mixed traffic and BRTS. To
improve passenger service, PMPML is operating 150 electric buses in BRT
corridors. It is operating 25 9m e-buses and 125 12m e-buses. The transport
utility wanted to test the technology first and issued an RFP for 25 9m AC buses.
PMPML was expecting a range of 225 km in a single charge. Conforming to
UBS-II, auto transmission and air suspension were included in the technical
specs.

Owing to the availability of ample space for parking and setting up charging
stations, Bhekrai Nagar and Nigdi depots were chosen to house electric buses.
To minimise dead kilometres, routes originating/terminating from these depots
were chosen. Inner-city routes were given preference over their suburban
counterparts. Only Olectra-BYD offered to supply buses and PMPML went ahead
with their bid after receiving reasonable rates.

PMPML is paying ₹40.32/km ($0.52/km) for 9m bus and ₹58.5/km ($0.75/km) for
12m bus with 1% increase every 2 years. The contract tenure is 10 years which is
subject to an extension of 2 years after evaluating the performance. The cost of
electricity is being borne by PMPML. The rate of electricity is ₹4.5 ($0.06) per
unit at night and ₹ 7.78 ($0.10) per unit during the day.

45. PMPML statistical report (February 2020)

Status of Electric Buses in India 47

 Because this procurement was done outside the FAME scheme, PMC and PCMC -
municipal corporations of Pune and Pimpri Chinchwad decided to provide an
upfront subsidy of ₹50 lakhs ($64k) per bus themselves. The fare on electric
buses is similar to regular buses and have seen tremendous success from the
day of launch in February 2019.

Source - Twitter, Hemant AutoclickZ

Case study: Electric buses in Tamil Nadu

The Tamil Nadu Transport Department believed that the subsidy under FAME-I is
not sufficient to catalyze a transition to electric buses, and would instead lead
to higher operating costs of ₹20/km ($0.26/km) for the transit agencies
compared to the current diesel buses operations in spite of the subsidy. Hence,
the Government of Tamil Nadu did not proceed with procuring electric buses,
despite 525 electric buses being sanctioned under FAME-II by the central
government for different transit agencies in the state.

Tamil Nadu is now exploring financial assistance from sources other than the
FAME scheme. The state plans to procure an additional 500 electric buses under
the first phase of a loan agreement with KfW, the German development bank.
Overall, the state envisions deploying 2000 electric buses across the state with
assistance from KfW in phases.

Status of Electric Buses in India 48

 05
Way Forward
5. Way Forward
The subsidies under the FAME scheme primarily drive electric bus procurement
in India. The scheme has accelerated electric bus adoption across the country
and integrated GCC model among the STUs.

At this juncture, it is important to repeat that most city bus systems don't
recover the cost of operations. Public bus transport in India is characterized
with lower Earnings Per Kilometer (EPKM) than the Costs Per Kilometer (CPKM) in
a vast majority of cases. Urban public bus service operators in India reported a
total loss of over ₹63,185 crores ($8.1 billions) in 2018-1946. The state and central
government contributions for them stood at ₹32,490 crore ($4.2 billions) in the
year 2018-19.

This makes financing institutions wary about funding e-bus procurement which
is anyway currently a costly proposition. Any prospective lender, currently
contemplating entry strategies for the e-bus ecosystem, is cautious of the
technological nascency of e-buses, credit unworthiness of the STUs, the
resulting lack of payment securities in place, and the escrow mechanism within
the GCC model.

A major reason for financial lenders’ discomfort regarding e-bus procurement by

STUs in India is the escrow mechanism within the GCC model. Although escrow
account-based payment mechanism is intended to secure the payment, the
operator and the lender find that they effectively do not have any control over
the escrow account; rather, the control lies solely with the STU.

The only asset in possession of the lender (within the concession period) would
be the depreciating assets such as e-buses and their chargers. Escrow accounts
should be tripartite with the lender, operator and STU. It is recommended to
provide two- or three-month payment guarantees to lenders and operators to
increase the project’s bankability. This will provide payment securities to
operator thus reducing the cost of financing for electric bus projects.

As more cities are procuring e-buses on the GCC model now, it is important to
identify a sustainable source of funding to keep the service up and running.
While viability gap funding from the government is useful, states and cities
should consider setting up urban transport funds. It will not only help sustain
operations of electric buses but also help cities maintain high-quality service.

46. https://www.adb.org/sites/default/files/publication/710081/mumbai-metro-transforming-transport.pdf

Status of Electric Buses in India 50

 Metro rail corporations seek loans from development banks like JICA, KfW, ADB
etc. Tamil Nadu has used loans from such development banks to improve and
expand their bus operations, and other STUs must also consider this method of
financing.

Additionally, STUs should make effort to understand the tender clauses from the
bidders’ perspectives and make amendments to allow flexibility in
configurational requirements to maximize the pool of participants. Moreover,
the STUs should share more data on fleet operations with the bidders to enable
proper planning and effective service level agreements.

Opportunity charging and depot charging should be well planned. A major

advantage of opportunity charging is to avoid the requirement for large-size
batteries, thereby lowering the procurement cost. Further, careful depot
planning with the objective to reduce dead kilometers and to set up upstream
electrical infrastructure close to nearest High Tension supply line can help bring
down per kilometer cost of operation.

Demand aggregation model can be explored to take advantage of economy of

scale. CESL has initiated a grand challenge to procure e-buses at a large scale
and distribute them to STUs. However, for such models to be more effective,
CESL should be a part of the tripartite agreement along with the operators and
STUs. Furthermore, financing alternatives should be explored to secure timely
payments and thus, lower the cost of financing.

The incentives being provided by the government has created a good

environment for the electric bus industry in the country to flourish in the
coming time. As the market grows the cost of manufacturing will also come
down, and so will the procurement cost. With financing looking relatively strong
for e-buses in the future, it's now important for public transport undertakings to
equip themselves technically to deploy and utilise the upcoming e-bus fleets
efficiently and effectively.

Status of Electric Buses in India 51