In the works: Plan to marshal 8 lakh electric buses by 2030

To push ahead with its programme to replace diesel with environment-friendly energy, the administration is pursuing a plan to replace 8 lakh diesel buses over the next seven years. The number of busses to be replaced amounts to one-third of the busses on the roads. Needless to say, they will be replaced by their electric cousins, said a report by The Economic Times.

The details of the scheme are likely to be revealed in the new financial year.

The number can be assessed against the backdrop of the fact that in the bustling EV market of China, as many as 1.38 lakh electric buses were sold in 2022. The number of electric buses sold in Europe in the same time was 4,000.

If the plan fructifies, it would also power investments in the electric vehicle (EV) ecosystem in India that needs to develop rapidly if the transition from fossil fuels to electric vehicles are to take place successfully across the country.

Disaggregating the numbers, the plan stands thus: 5.5 lakh buses for private transporters, 2 lakh for state transport undertakings (STUs) and about 50,000 for schools.

Furthermore, this plan might be implemented in place of the Faster Adoption and Manufacturing Electric Vehicles (FAME) incentive scheme, the third chapter of which is due. One of the macro-objectives of the new plan is to turn the country into a global manufacturing hub for electric vehicles.

“Replacing diesel buses with electric ones will not only address environmental concerns but also help create an ecosystem for electric vehicles. It will accelerate the establishment of a widespread charging infrastructure, generate investments, bring about scale, which will reduce per-unit cost, and simultaneously create jobs in manufacturing,” a senior government official told the newspaper.

The numbers are quite staggering. Experts peg that about Rs 1.2-1.5 lakh crore would be needed to put 1 lakh electric buses on the roads at current price levels.

Government officials and officials from multilateral funding agencies have held a couple of meetings that are trying to find out how to convert the demand into production. Economies of scale are being worked out to put in place basic parameters for tenders that will bring down the cost of each vehicle.

Right now, only about 4,000 electric buses plying on the roads of this country. The number of buses fuelled by CNG and diesel is 23 lakh – or 575 times the number of electric buses.

“India currently has about 2,300,000 buses, of which 140,000 are run by public transport authorities. The conversion of private buses to electric is an important step in India’s decarbonisation efforts,” said Saurabh Kumar, vice president, the Global Energy Alliance for People and Planet (GEAPP) in India.

Another official quoted by the newspaper said, “Financial institutions would have to come on board, like they did while investing in developing mass rapid transit systems (MRTS), to electrify buses at this scale. The government is keen as they feel, rather than incentivising personal buyers who can afford electric cars and two-wheelers, it is better to invest resources in a segment which will have the highest impact, socially as well as environmentally.”

The Centre’s initiative is timed against the broader backdrop of the government pledging to work towards a joint payment security mechanism for deploying 38,000 electric buses in the country to achieve net zero targets. This announcement was made in Dubai at the COP28 Summit.

Even without this programme the government was planning to deploy about 50,000 electric buses in five years to reduce import of crude and tackle vehicular pollution. The joint payment security mechanism has been designed to help state transport undertakings almost all of which are fiscally stressed. It would help these entities by allowing delayed payments.