JBM Group, a leading auto parts maker and manufacturer of electric buses, projects the demand for electric buses in the State Transport Utilities (STUs) segment to reach about 1,50,000 units in seven years.

In FY24, e-bus sales surged 79 per cent totalling 3,607 units, driven primarily by public sector entities, including state transport undertakings (STUs). The segment is expected to experience exponential growth in the coming years, with numerous allocations under various tenders.

In 2023, Maharashtra, Karnataka, Jammu and Kashmir, Telangana and Gujarat were the top five States driving demand for electric buses, collectively accounting for nearly 41 per cent of the country’s new e-bus fleet additions, JBM Auto said in its latest annual report.

Ownership costs

Per JBM Auto estimates, e-bus demand in STUs is expected to be about 1,50,000 units (the government target is 2,00,000 buses) during 2024-30. Presently, about 4,000 electric buses are operational in India.

In India, cities predominantly employ net cost contract (NCC) and gross cost contract (GCC) models, in addition to the owner-operator model. Under the GCC model, the operator is responsible for procuring e-buses and setting up the charging infrastructure, relieving STUs of the need for significant upfront capital investment. The operator is paid based on the number of kilometres the buses operate.

JBM Auto estimates the total cost of ownership (TCO) for e-buses to be about 15-20 per cent lower than internal combustion engine (ICE) buses over an estimated 15-year lifespan, with a breakeven point around six years. Although e-buses currently have a higher upfront cost compared to diesel or CNG buses, this is expected to decrease as manufacturers enhance efficiency, localize production, and optimise battery costs.

To support the adoption and institutionalisation of a sustainable business model for private players, the government has introduced a Payment Security Mechanism (PSM), ensuring timely payments to e-bus operators and OEMs by State governments, similar to the model used in the renewable energy sector, according to Nishant Arya, Vice Chairman & Managing Director of JBM Auto.

Strong order book

Highlighting the company’s growth in the Indian e-bus market, Arya noted that the JBM Group’s order book remains strong with new wins. The company claims to have secured a significant market share in the private bus segment. JBM Ecolife Mobility, a subsidiary of JBM Auto, secured a contract from Convergence Energy Services Limited (CESL) under the PM e-Bus Sewa scheme to operate 1,390 e-buses at a cost of ₹7,500 crore. “Going forward, JBM Auto has set itself an ambitious plan of introducing an additional 3,000 e-buses in the FY25,” he said.

JBM Electric Vehicles, another subsidiary of JBM Auto, signed an agreement with MUON India, a Macquarie Group company, which has launched an EV financing platform in India called ‘Vertelo’. Under this agreement, JBM Auto will deploy over 2,000 electric buses for MUON over the next couple of years.

The ₹5,009-crore JBM Auto has established an electric bus manufacturing facility in the Delhi-NCR region and it will have the capacity to produce up to 20,000 e-buses and special-purpose vehicles.

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