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India unveils bold plan to replace 800,000 diesel buses with electric fleet by 2030
Industry News- Jan 03,24
This ambitious initiative aims to revolutionise the public transport system, contribute to environmental sustainability efforts, and promote the growth of the electric vehicle (EV) sector in India.
According to a report from The Economic Times (ET), the government is formulating a plan to replace 800,000 diesel buses, constituting approximately one-third of all buses on the roads, with electric counterparts within the next seven years. This ambitious initiative aims to revolutionise the public transport system, contribute to environmental sustainability efforts, and promote the growth of the electric vehicle (EV) sector in India.
As per government sources cited by ET, the replacement strategy entails deploying 200,000 electric buses for state transport undertakings (STUs), 550,000 for private operators, and 50,000 for schools and employee transportation by the year 2030.
Beyond addressing environmental concerns, the shift from diesel buses aligns with the broader goals of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) incentive program. Initiated by the Ministry of Heavy Industries in 2015, FAME received funding of Rs 10,000 crore for a three-year period starting in 2019. With the official deadline for FAME II approaching in March 2024, the government is already working on FAME III, potentially incorporating production-linked incentives (PLI) schemes and prioritised lending to support India's EV industry.
The transition to electric buses offers additional benefits, including the acceleration of widespread charging infrastructure establishment, attraction of investments, achievement of economies of scale, reduction in per-unit costs, and the creation of employment opportunities in the manufacturing sector.
To implement the plan, a capital investment ranging from Rs 1.2 to 1.5 trillion may be necessary to roll out 100,000 electric buses at current prices. The government is actively engaging with stakeholders to finalise the details of the scheme, with plans to unveil it in the upcoming financial year.
Discussions have centred on aggregating and converting demand through large procurement tenders to drive down costs per unit and streamline distribution to existing transporters. Presently, India has around 4,000 operational electric buses on its roads, compared to 2.3 million diesel and CNG buses.
This proposed initiative aligns with the recent collaboration between the Indian government and the US to establish a joint payment security mechanism (PSM) for deploying 38,000 electric buses in the country to meet net-zero targets. Additionally, the government aims to introduce 50,000 electric buses over the next five years under the National Electric Bus Programme (NEBP) to reduce crude imports and combat vehicular pollution. The PSM is expected to ensure timely payments from financially constrained state transport companies, expediting the electrification of the national bus fleet.
Source: Economic Times
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