The Indian electric bus market was valued at $94.3 million in 2020 and is projected to reach $1,364.4 million by 2025, progressing at a CAGR of 48.8% during the forecast period (2021–2025). This is due to the growing environmental awareness among people and the government and the increasing initiatives by state and central governments for the adoption of electric buses. The Indian government is also actively running programs, such as the Smart Cities Mission and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), to promote energy-efficient vehicles for public transportation and develop related infrastructure.
Before the coronavirus outbreak (COVID-19), 2020 was a crucial year for automakers selling electric buses in India. As the government extended lockdown period due to the increasing cases of COVID-19, vehicle sales has declined in the short term, owing to the disruptions in supply chain, cash flow, and sales and marketing operations. The crisis has prompted many industry stakeholders, including governments, manufacturers, and component suppliers, to re-examine and prepare for medium- and long-term growth, transformation, and upgradation in the India electric bus industry.
On the basis of type, the Indian electric bus market is categorized into battery electric bus (BEB) and hybrid electric bus (HEB). Between the two, the BEB category is expected to lead the market during the forecast period, due to its higher usage and suitable infrastructure for the production of BEB buses in India. Moreover, increasing government support in the form of incentives, subsidies, and other financial benefits, to promote the adoption of these eco-friendly buses is benefiting the market growth of these buses in the country.
Further, based on application, the Indian electric bus market is categorized into intracity and intercity; out of these, the intercity category is projected to witness higher growth during the forecast period. This can be ascribed to the rapid urbanization, increase in environmental issues, and rise in number of government initiatives, incentives, and regulations that promote the connectivity within different cities.
Geographically, North India is expected to witness the fastest adoption of electric buses during the forecast period, in the Indian electric bus market. This can be mainly due to the central and state governments' support with continuous updated policies for the adoption of electric buses in the region. Furthermore, increasing pollution level and stringent emission norms are the major factors for state transport undertakings to adopt electric bus vehicles for public transportation.
Some of the major players in operating in the Indian electric bus market are Ashok Leyland Limited, JBM Auto Limited, Solaris Bus & Coach S.A., Deccan Auto Limited, Olectra Greentech Limited, Tata Motors Limited, Zhongtong Bus & Holding Company Limited, BYD Company Limited, and Eicher Motors Limited. To make the most of the government efforts for clean mobility, these companies are pursuing client orders to increase their revenue.
For instance, in January 2021, Olectra Greentech Limited and Evey Trans Private Limited have received the letter of award from Pune Mahanagar Parivahan Mahamandal Ltd. for 350 electric buses under FAME II scheme of the Government of India. This order is for the supply of 350 electric buses on GCC/OPEX model basis for a period of 12 years.
Similarly, in November 2019, Ashok Leyland Limited announced that it has bagged an order from Tamil Nadu State Transport Undertakings (TNSTU) for 1,750 electric buses. This order would further consolidate the company’s leadership position.