| Published | Report Code | Available Format | Pages |
|---|---|---|---|
| May 2019 | AT11325 | 84 |
India Electric Bus Market Overview
The Indian electric bus market is expected to reach 7,187 units by 2025, registering a CAGR of 53.0% during the forecast period. The market has recently witnessed a significant growth, mainly driven by the government’s strict emission norms and regulations, support in the form of subsidies and grants, and State Road Transport Undertakings (STUs) decision for the procurement of electric buses. The Government of India has planned for the procurement of electric buses for selected cities having one million-plus population, and is providing funds for the same. In addition, old conventional fuel-based buses are expected to be replaced by new electric ones during the forecast period. Large fleet of old conventional buses in the country provides considerable opportunity for the electric bus sales in the country.
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On the basis of type, the Indian electric bus market is categorized into battery electric bus (BEB) and hybrid electric bus (HEB). Of these, the BEB category is estimated to witness faster growth during the forecast period in terms of sales volume, and contribute more than 90% share to the market by 2025. This is attributed to the declining prices of BEBs and the reduced carbon emissions from these vehicles. BEB evolved over the time, especially in terms of electric batteries, with assistance from both government and private programs. Additionally, many urban areas, where transit buses operate, experience air quality problems. These are the factors driving the decision to adopt BEBs.
On the basis of length, the Indian electric bus market is divided into less than 10 meters and more than 10 meters. Between these two, the less than 10 meters category witnessed higher sales volume in 2018, and is expected to continue being the leading category during the forecast period, owing to the preference for smaller buses in the country by the STUs. The low cost of these buses is a key factor that will continue to drive their market growth during the forecast period. Moreover, subsidies provided by the central and state governments are based on the localization factor, which support the adoption of smaller buses.
On the basis of region, the Indian electric bus market is categorized into south, east, west, and north. In terms of volume, the southern region held a market share of more than 50% in 2018. However, the northern region is predicted to witness a CAGR of more than 57.1% during the forecast period.
India Electric Bus Market Dynamics
Drivers
In recent years, various schemes and regulations have been put forth by the Indian government to support the development of electric buses in the country. In March 2019, the Ministry of Heavy Industry and Public Enterprise laid out the eligibility criteria for electric buses, passenger vehicles, three- and two-wheelers to avail of the FAME II incentives. The new investment of $1,460 million (INR 10,000 crore) provides a stable policy in order to promote green mobility in India and is expected to support more than 1,500,000 electric vehicles in the next three years (from April 2019 to March 2022). According to the scheme, the government would incentivize 7,090 electric buses by investing $517.5 million (INR 3,545 crore).
Similarly, in November 2017, the Ministry of Housing and Urban Affairs (MoHUA) announced the Green Mobility Scheme for 103 cities, at the Urban Mobility India (UMI) Conference and Expo, to bring improvements in public transport facilities. Under the Green Mobility Scheme, the government aims to procure 20,000 paratransit and 6,000 regular buses that run on alternative fuel. The Ministry is also actively running programs such as the Smart Cities Mission and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) to develop urban infrastructure, mainly focusing on the utilities. Such government measures are expected to continue benefiting and driving the Indian electric bus market in the coming years.
Restraints
The lack of proper infrastructure is the major restraint for the growth of the Indian electric bus market. Electric buses run on the electric charge stored in the battery. For electric buses to compete with their conventional diesel- or CNG-based counterparts in terms of the driving range, proper charging infrastructure is required. The deployment of electric buses is significantly impacted by the scarcity of electric vehicle charging stations in the country. To deploy an electric bus, the buyer must consider factors such as charging infrastructure, electricity demand, and terrain structure. At present, the charging station infrastructure is inadequate, being limited to few developed cities of the nation.
Also, there is not enough support from entities such as service providers, electric utilities, and financial institutions, thus restraining the growth of the electric bus market in the country.
Indian Electric Bus Market Competitive Landscape
Key players operating in the Indian electric bus market are Ashok Leyland Limited, Olectra Greentech Limited, Tata Motors Limited, JBM Auto Limited, Solaris Bus & Coach SA, BYD Auto Co. Ltd., Zhongtong Auto Co., Optare PLC, Deccan Auto Limited, and Volvo Eicher Commercial Vehicles Limited.
