India Electric Bus Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

India Electric Bus Market Trends & Growth Drivers

Collaborations between Domestic and International OEMs Is Key Trend

• With the Indian government’s implementation of stringent regulations on vehicular pollution, the demand for low-emission public transportation has been rising in the country. As electrically powered buses are being promoted and supported through financial incentives by the government, conventional buses are expected to be phased out in the coming years.
• Anticipating the surging demand for electric buses in India, international players, such as Optare PLC (U.K.), Solaris Bus & Coach S.A. (Poland), Zhongtong Bus Holding Company Limited (China), and BYD Auto Company Limited (China), have entered into tie-ups with domestic players, such as Ashok Leyland Limited, JBM Auto Limited, Deccan Auto Limited, and Olectra Greentech Limited, to set up vehicle assembly facilities in the country.
• Besides, Chinese OEMs are looking to start operations in India, having already held talks with the concerned industry bodies, such as the Society of Manufacturers of Electric Vehicles (SMEV) and Automotive Component Manufacturers Association (ACMA).
• The Indian electric bus market is expected to grow significantly in the future and is, therefore, attracting Chinese OEMs, such as Changsha Sunda New Energy Vehicles Technology Company Limited, for business growth through collaborations with domestic players.

Rapid Urbanization and Growing Environmental Awareness Are Key Drivers

• The national population figures continue to grow, and so does the number of vehicles (both passenger and commercial). The emissions from these vehicles are deteriorating the air quality, which is becoming a serious health concern. In light of this, the government has already switched from the BS-IV emission standards to the BS-VI emission standards 2020 onward.
• The urban population in India has escalated rapidly over the past decade. As a result, the dependence on public transport and the need for sustainable transport systems have increased considerably in recent years.
• The government is promoting zero-emission buses through various environmental awareness campaigns. Several environmental organizations are also focusing on awareness programs to bring about a change in the preferences of people and help the government achieve its objective of cutting the carbon footprint. These efforts are expected to drive the production and sale of such vehicles in the country in the near future.

Lack of Adequate Charging Infrastructure and Related Ecosystem Is Major Restraint

• The penetration rate of electric buses in India can be improved by augmenting their range and improving the charging infrastructure within the country, as the poor infrastructure is one of the major factors restraining the adoption of electric buses.
• These buses run on the electrical charge stored in batteries. Thus, for them to compete with their conventional diesel and CNG counterparts in terms of driving range, proper charging infrastructure is required.
• The lack of charging stations and the import dependence for batteries, due to the inadequate manufacturing of Li-ion batteries, are significantly impacting the deployment of electric buses in the country. Before deploying an electric bus, a buyer always considers factors such as the charging infrastructure, electricity demand, and terrain.
• At present, the charging station infrastructure is inadequate, being limited to a few developed cities. However, the NITI Aayog has already okayed the procurement of 6,315 electric buses in 65 cities, under the FAME II scheme. But, the installation of on a large scale is time-consuming and would require significant public and private funding, which may restrain the market growth in the near future.
• Moreover, the low capacity utilization for the manufacturing of batteries, motors, and related electric bus components is hampering the growth of the Indian electric bus market. The in-house manufacturing of these components is limited due to the scarcity of production facilities.
• However, with government initiatives, such as the Make in India, the National Electric Mobility Mission Plan (NEMMP) 2020, and the FAME II, the situation is likely to improve in the coming years, thus boosting the electric bus ecosystem.

India Electric Bus Market Industry Outlook

Type Insights

• The BEB category is projected to grow at the higher CAGR, of 18.4%, during 2024–2030, as well as hold the larger market share. This is due to the availability of subsidies, incentives, and other financial benefits to promote the usage of eco-friendly buses.
• The demand for BEBs in India is rising along with that for low-emission public transportation. Moreover, the government at the central and state levels has implemented numerous programs to reduce GHG emissions.
• The expansion of the EV charging infrastructure and the enhancements in the battery technology are driving the electric bus demand in the nation.

During the study, we have analyzed two types of buses in the report:

• Battery Electric Bus (BEB) (Larger and Fastest-Growing Category)
• Hybrid Electric Bus (HEB)

Length Analysis

• In terms of value, the less than 10 m bus category is expected to hold the larger share in the market in the coming years. The low cost of these buses is a key factor that will drive their sales in the forecast period.
• The subsidies provided by the central and state governments are based on the localization factor. Since the localization of buses of less than 10 m is more than that of those exceeding a length of 10 m, the former category is dominating the market.

Below are the electric bus lengths covered in the report:

• Less than 10 m (Larger and Faster-Growing Category)
• More than 10 m

Battery Insights

• The LFP category accounted for the major share, of over 50%, in 2023. These batteries are safer than others and capable of charging at a high speed, which makes them a better option for large commercial vehicles.
• Most electric buses use LFP batteries because they are cheaper to manufacture compared to other batteries. Thus, cost sensitivity has been one of the key factors in the decision to use LFP batteries in electric buses.

The following batteries are included in the report:

• Lithium–Iron Phosphate (LFP) (Largest Category)
• Lithium–Nickel–Manganese–Cobalt Oxide (NMC) (Fastest-Growing Category)
• Others

Application Analysis

• The intracity category held the larger market share, of around 70%, in 2023. This is mainly due to the rapid urbanization and growing environmental concerns. The government schemes, incentives, and regulations supporting domestic manufacturing have been leading to the market growth in this category.
• The intercity category is expected to witness the faster growth during the forecast period. Buses that are used for intercity services have long-range capabilities, and they also need frequent charging as they cover long distances in traveling from one city to another city.

Below are the major applications of electric buses in India:

• Intercity (Faster-Growing Category)
• Intracity (Larger Category)

North India Is Fastest-Growing Region

• Electric bus sales in North India are expected to grow with the highest CAGR in the forecast period, of more than 18.5%, owing to the support provided by the state governments to boost the adoption of these vehicles. The market growth in the region is mainly driven by the high pollution level in the country’s capital, Delhi.
• The Delhi government is planning to deploy electrically powered coaches in a phased manner in the capital. Delhi aims to become the first city in India to have 8,000 electrically powered coaches in its public transport fleet, as part of which, in the August of this year, the DTC added 97 such automobiles.
• The government offers different types of financial incentives to make EVs more affordable for private operators.
• Apart from Delhi, other states in the region are also actively working toward the deployment of electric buses. For Instance, the Uttar Pradesh Cabinet has approved a new EV policy in September 2022, which aims to make the state a global hub for the manufacturing of EVs, batteries, and associated equipment.
• A 15% rebate will be given on the purchase of electric two-/three/four-wheelers, including buses.

The regions analyzed in this report include:

• South (Largest Regional Market)
• East
• West
• North (Fastest-Growing Regional Market)

Market Nature – Consolidated

The Indian electric bus market is highly consolidated, with few players offering these automobiles. At present, PMI Electro Mobility Solutions Private Limited and Olectra Greentech Limited hold the major market shares. Moreover, buoyed by the Indian government’s initiatives, such as incentives and favorable policies, to boost EV adoption, other OEMs are also entering India’s electric bus industry.

India Electric Bus Market News

• In July 2023, Tata Motors Limited’s smart electric bus prototype was flagged off by the Minister of Transport, Government of Karnataka.
• In February 2023, SWITCH Mobility Ltd., a Hinduja Group company, delivered the first set of SWITCH EiV 22s to Brihanmumbai Electric Supply and Transport (BEST), Mumbai. This first set of deliveries is part of the 200 electric double-decker bus order of BEST.
• In January 2023, Volvo Eicher Commercial Vehicles unveiled its 13.5-meter electric bus for intercity public transport.
• In December 2022, Tata Motors Limited signed a definite agreement with Bengaluru Metropolitan Transport Corporation for operating 921 electric buses in Bengaluru.
• In June 2022, Pinnacle Industries Ltd. partnered with Cityflo, an app-based commute company headquartered in Mumbai, to design, develop, and manufacture seating and other interior components for the latter’s new proprietary bus.