India Electric Bus Market Overview, 2029

India's electric bus market is revving up for a ride unlike any other. India, boasting the world's largest population, has a colossal public transportation system heavily reliant on diesel buses. This dependence translates to alarming air pollution levels in major cities. A recent trend gaining traction is "retrofitting" – converting these buses to electric operation. This not only reduces upfront costs for operators but also breathes new life into existing infrastructure. The Indian government is actively driving electric bus adoption through subsidies like the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME) scheme. The FAME III plan, expected in the 2024 budget, prioritizes electric buses for public transport electrification. A potential 100-120 Million USD budget aims to replace one-third of diesel buses (800,000) by 2030. The strategy targets State Transport Undertakings (200,000 buses), private operators (550,000 buses), and schools/employee transport (50,000 buses). This shift is projected to significantly boost India's EV market and achieve environmental goals. Recognizing the financial heft required for large-scale electric bus deployment, the Indian government is actively fostering public-private partnerships (PPP) between bus operators, energy companies, and financial institutions. These partnerships not only ease the initial investment burden for state bodies but also create a collaborative ecosystem for infrastructure development, including setting up a robust charging network. This collaborative approach is vital for ensuring the long-term sustainability of the electric bus revolution in India.

According to the research report "India Electric Bus Market Overview, 2029," published by Bonafide Research, the Indian Electric Bus is projected to add more than USD 1.5 Billion from 2024 to 2029. India's electric bus market is poised for significant growth, driven by a confluence of factors. Firstly, the ever-worsening air quality in major cities, with 17 of the 20 most polluted cities globally in 2022, is pressuring the government to adopt cleaner public transportation solutions. Secondly, the skyrocketing fuel prices are squeezing the already tight finances of State Transport Undertakings (STUs), making electric buses with their lower operational costs increasingly attractive. Thirdly, ambitious national targets like the FAME II scheme, which offers subsidies for electric bus procurement, are providing a tailwind for market expansion. However, this promising landscape is not without its challenges. The primary hurdle lies in the upfront capital expenditure of electric buses, which can be two to four times higher than their diesel counterparts. This puts a massive strain on STUs, which are already struggling financially. Financing models need to be innovative, with possibilities like Gross Cost Contract (GCC) models where private players invest in the buses and are paid based on kilometers operated, being explored. Another major challenge is the nascent charging infrastructure. While the government is pushing for setting up charging stations, the current density is inadequate, limiting the operational range of e-buses and hindering route planning. Additionally, the reliability and efficiency of the electricity grid need improvement to ensure consistent power supply for charging. Furthermore, there are concerns regarding the limited driving range of electric buses on a single charge, especially in hot climates that can affect battery performance. This can potentially disrupt service schedules and passenger convenience. Skilling up the workforce to maintain and operate these new technologies is another crucial aspect that requires attention. Despite these challenges, the Indian electric bus market presents a compelling opportunity for economic growth, environmental improvements, and public health benefits.

Currently dominating the Indian electric bus landscape by vehicle, Battery Electric Vehicles (BEVs) rely solely on electric batteries for propulsion. They offer zero tailpipe emissions, making them ideal for tackling air pollution challenges in urban areas. Government schemes like FAME II (Faster Adoption and Manufacturing of Electric and Hybrid Vehicles) incentivize BEV adoption, leading to their widespread deployment in intracity public transport fleets. However, limitations like range anxiety due to battery capacity and dependence on robust charging infrastructure pose challenges. As battery technology evolves and charging infrastructure expands, BEVs are expected to maintain their frontrunner position. Plug-in Hybrid Electric Vehicle (PHEV) bridge the gap between conventional diesel buses and BEVs. They possess both an internal combustion engine (ICE) and an electric motor, with the ability to be plugged in for battery charging. PHEVs offer extended range compared to BEVs, making them suitable for intercity routes where charging infrastructure might be sparse. Additionally, they can function on the ICE when battery power depletes, mitigating range anxiety. However, PHEVs introduce complexities with a dual powertrain system and still contribute some tailpipe emissions. Their market share is likely to be measured, catering to specific route requirements where the flexibility of both electric and ICE operation is advantageous. Fuel Cell Electric Vehicle (FCEV) are a nascent technology in the Indian electric bus market. They utilize hydrogen fuel cells to generate electricity, powering the electric motor and producing only water vapor as a byproduct. FCEVs hold immense promise for long-distance travel with rapid refueling times similar to conventional buses. However, significant hurdles exist. Firstly, India lacks a robust hydrogen infrastructure, making FCEV operation geographically limited. Secondly, the technology itself is expensive, hindering widespread adoption. Government and industry efforts are underway to establish hydrogen corridors and bring down FCEV costs. While their initial presence will be modest, FCEVs have the potential to revolutionize long-distance electric bus travel in the future.

Intracity electric buses dominate the Indian market by application, catering to public transportation needs within cities. Factors like growing urban populations, rising fuel costs, and stringent emission regulations in metro cities are driving the demand for intracity electric buses. These buses operate on fixed routes with shorter distances, allowing them to leverage overnight charging at depots. Focus is on maximizing passenger capacity and optimizing battery range for efficient intracity operations. BEVs, with their zero-emission benefits and suitability for shorter routes, are the preferred choice for intracity applications. The intercity electric bus segment in India is at an early stage of development. While the long-distance capabilities of FCEVs are promising, the lack of hydrogen infrastructure is a major constraint. PHEVs offer a potential solution, providing the extended range needed for intercity travel while mitigating range anxiety through the ICE engine. However, the operational complexity and residual emissions of PHEVs need to be addressed. Another approach for intercity routes could be strategically deploying BEVs with longer ranges and establishing fast-charging stations along key highways. The intercity electric bus segment requires strategic planning for infrastructure development and technological advancements to enable long-distance electric travel with minimal disruption.

By end users, public transportation authorities and state governments are the primary drivers of electric bus adoption in India. Government initiatives like FAME II provide substantial subsidies for electric bus procurement, making them more financially viable for public transport operators. Focus is on replacing aging diesel fleets with electric buses to reduce operational costs, improve air quality, and enhance public transport efficiency. Intracity public transport networks are the biggest beneficiaries, with a growing number of electric buses deployed in cities across India. Private players, including corporate shuttle services and educational institutions, are gradually exploring electric buses. The environmental benefits and potential cost savings associated with lower operating expenses are attractive propositions. However, the higher upfront cost of electric buses compared to diesel counterparts remains a deterrent for some private operators. Additionally, the limited availability of electric buses and the dependence on public charging infrastructure can be challenges. As the electric bus market matures and economies of scale come into play, private sector adoption is expected to gain momentum.



Competition in India's electric bus market doesn't come from a direct clash with foreign manufacturers setting up shop domestically. Chinese electric vehicle (EV) companies, for instance, have a significant advantage due to their government's aggressive push for EV dominance. This translates into economies of scale in battery production, which is a major cost factor for Indian bus manufacturers. Additionally, these Chinese companies often have close ties with state-owned banks, allowing them to offer attractive financing packages to developing countries like India. This can put Indian manufacturers at a disadvantage, especially when bidding for large government tenders. European nations like Norway and Netherlands have a head start in e-bus deployment and have fostered strong domestic electric bus manufacturing bases. While these countries might not be directly exporting buses to India, their experience and technological advancements put pressure on Indian manufacturers to improve efficiency, reduce costs, and produce e-buses that can compete on a global scale. Additionally, South Korea, another major EV player, is actively seeking partnerships with Indian companies, adding another layer of competition in the race to technological dominance. Another concern is the influence of countries with a strong hold on critical raw materials like lithium and cobalt, which are essential for Lithium-ion batteries used in electric buses. Price fluctuations and supply chain disruptions due to geopolitical tensions can significantly impact the cost and production timelines of Indian electric buses. However, India is taking steps to counter these challenges. The government's focus on "Atmanirbhar Bharat" (Self-reliant India) aims to create a domestic EV ecosystem, including battery manufacturing. Additionally, India is exploring partnerships with other countries like Australia for a stable supply of critical raw materials.

Considered in this report
• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in this report
• Electric Bus market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Vehicle
• Battery Electric Vehicle
• Plug-in Hybrid Electric Vehicle
• Fuel Cell Electric Vehicle

By Application
• Intercity
• Intra-city

By End-Use
• Private
• Public

The approach of the report:
This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience
This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Electric Bus industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.