How Modi government plans to boost e-bus adoption in India
What's the story
The Indian government is working on a financing scheme to help private electric bus operators get affordable credit. The initiative, which is being developed by the Ministry of Heavy Industries, will use funds from the Small Industries Development Bank of India (SIDBI) and the National Bank for Agriculture and Rural Development (NABARD). This comes as lenders have become more cautious in the EV industry after BluSmart's collapse.
Transition support
Scheme aims to ease transition from diesel to electric
The proposed scheme, likely to be launched in the next six to 12 months, is aimed at easing the transition from diesel to electric fleets. It will offer lower-cost, longer-tenor funds to non-banking finance companies (NBFCs) through SIDBI and NABARD. This move is expected to reduce EMIs, extend repayment periods, and improve margins as well as risk-adjusted returns for operators.
Cost barrier
High upfront costs hinder e-bus adoption
E-buses are currently 2.5-3 times more expensive than diesel buses, making financing a major hurdle for adoption. This is especially true for private operators who dominate intercity and commercial routes. The new scheme is expected to complement existing incentives that have mostly focused on government-run city buses, thus expanding the scope of electric bus adoption in India.
Incentive expansion
Government's push to incentivize private bus operators
The government is now looking to incentivize private bus operators for procuring more electric buses. There are some 1-1.5 lakh government buses on Indian roads, but the private sector market is much bigger with about 19 lakh buses covering various intercity routes. This move shows the government's commitment to promoting electric mobility across all sectors of public transport in India.