India needs to actively engage the private electric bus sector to achieve its ambitious electrification targets, with government schemes currently focused predominantly on public transport operators leaving out 93% of the country’s bus fleet, Hanif Qureshi, IPS, Additional Secretary at the Ministry of Heavy Industries, said at the India EV Conclave on Tuesday.
“The government needs to tap into the private electric buses space,” Qureshi stated at the two-day event organized by Autocar Professional, highlighting a critical gap in current policy frameworks that could significantly accelerate India’s bus electrification journey.
Massive Untapped Potential
India’s registered bus fleet comprises approximately 2.4 million vehicles, of which public transport buses account for merely 7%—around 168,000 buses. The remaining 93%, roughly 2.2 million buses, operate in the private sector, serving intercity routes, employee transportation, school buses, and tourist services.
Despite this overwhelming dominance, private buses have been largely excluded from major national EV schemes and incentive programs. Current government initiatives, including the PM E-DRIVE scheme and its predecessors FAME I and II, have focused almost exclusively on State Transport Undertakings (STUs) and municipal corporations.
The PM E-DRIVE scheme, announced in 2024 with an allocation of ₹57,613 crore, targets deployment of 14,028 electric buses across nine cities—all in the public sector. While 7,000 electric buses are currently operational in India, the overwhelming majority serve public transport entities.
Scale Required to Meet 2030 Targets
India aims for 40% penetration of electric buses by 2030, a target that appears increasingly unrealistic without engaging the private sector. According to industry estimates, the country requires over 100,000 electric buses by 2030—more than 100 times the current deployment—necessitating approximately 11,000 new electric bus additions annually for the next several years.
By 2030, the projected demand for stage-carriage non-urban buses alone is 700,000, while urban buses are anticipated to reach 300,000. Meeting even a fraction of this demand through public sector procurement alone would be financially and administratively challenging.
Several leading private bus operators have already demonstrated willingness to adopt electric buses. Companies like NueGo and Chartered Speed have deployed electric buses in their fleets, albeit in small numbers, proving the viability of private e-bus operations.
Market analysis suggests that non-urban electric bus operations can be more profitable than diesel operations over the vehicle’s lifetime. Studies indicate that routes longer than 120 km can achieve profitability if vehicle utilization exceeds 400 km per day, while mofussil and hilly routes show particularly favorable economics due to regenerative braking benefits.
Barriers to Private Adoption
However, significant barriers prevent rapid private sector adoption:
Financing Constraints: High upfront costs and perceived risks make financing difficult. Electric buses cost 40-60% more than diesel equivalents upfront, and banks remain cautious about lending to private operators given lower perceived resale values and higher risk-return profiles.
Charging Infrastructure: FAME-funded charging facilities are limited to state transport unit depots. With 90% of private bus operators managing fleets of fewer than five buses, the high cost of land and charging infrastructure makes investing in dedicated facilities economically impractical.
Policy Frameworks: Current permit systems and regulatory frameworks weren’t designed with electric buses in mind, creating administrative hurdles for private operators seeking to transition.
Subsidy Exclusion: Unlike public operators who benefit from subsidies of up to ₹50-55 lakh per bus under various schemes, private operators receive no comparable incentives.
Countries like China have successfully engaged private sector bus operators in electrification efforts through a combination of upfront subsidies, low-interest financing, and mandates. Kenya and China have also pioneered Battery-as-a-Service (BaaS) models that separate battery ownership from vehicle ownership, dramatically reducing upfront costs.
Path Forward
Qureshi’s acknowledgment that the government must tap the private bus space suggests recognition at the policy level that a public sector-only approach won’t achieve India’s electrification targets.
The upcoming days may see concrete policy announcements addressing this gap, potentially including extending PM E-DRIVE or FAME successor schemes to private operators and charging infrastructure development specifically for private operator access.