Electric bus (e-bus) sales in India are expected to rise by 75-80 per cent this fiscal year, reaching 6,000-6,500 units, according to CRISIL Ratings. This growth is driven by government schemes like the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME), the National Electric Bus Programme (NEBP) under Convergence Energy Service Limited (CESL), and the Prime Minister eBus Sewa Scheme (PM-eBus Sewa Scheme), which have resulted in orders for 24,000 e-buses.
The Gross Cost Contract (GCC) model, preferred by State Transport Undertakings (STUs), minimizes upfront costs and guarantees a steady income for operatoRs To mitigate counterparty risk from financially weak STUs, the government introduced a payment security mechanism (PSM) under the Prime Minister eBus Sewa Scheme in August 2023.
Economies of scale in production and declining battery costs are expected to further lower e-bus prices and per-kilometre rentals. The strong existing order book and additional 7,800 buses under the Prime Minister eBus Sewa Scheme will further boost the sector.