As India charts its clean energy transition, particularly through e-buses in the transport sector, the domestic electric vehicle (EV) manufacturing ecosystem stares at a challenging landscape.
Market players and analysts assert that the industry is grappling with high prices, lack of raw materials, poor charging infrastructure, limited financing and low product availability. Transport accounts for around 13 per cent of India’s CO2 emissions and the bulk of energy consumed.
A Niti Aayog report predicts that, EV sales penetration for buses will be 40 per cent by 2030. For comparison, KPMG in a recent report said that in FY20, e-buses accounted for 1.5 per cent (600 units) of the total bus sales. In FY21, it rose to 14 per cent (1,050 units), further growing to 19 per cent, or roughly 2,200 units in FY22.
Tenders have already been floated for 5,500 e-buses by the government with plans for another 50,000 in the coming years.
Abhijeet Sinha, National Project Director, National Highways for EV (NHforEV) said that EV’s market value is predicted to increase from $94.3 million in 2020 to $1.36 billion by 2025, at 48.8 per cent CAGR during 2021-2025. Presently, the manufacturing capacity is around 8,000-9,000 buses.
A top EV industry executive summarised the scenario as, “We can see huge demand coming, but where is the capacity? Producing 55,000 e-buses is ambitious, but meeting it requires huge efforts. It is possible, in say 7-8 years, but it all depends on capacity and raw materials.”
Challenging landscape
The e-bus market is expected to see an exponential growth, emphasises Sinha, adding that one of the issues is lack of charging infrastructure for the inter-city transport. Besides, the capacity of e-bus production in India is still at a nascent stage.
“Like other EVs, e-buses face similar issues in easy adoption — financial and operational challenges. NHforEV addresses these challenges through the AHEM model and tech trial runs between Delhi-Jaipur and Delhi-Agra to understand the charging requirements, roadside assistance and customer demands during long drives,” Sinha added.
Battery manufacturing start-up, Neuron Energy’s Co-Founder, Pratik Kamdar, expects e-bus adoption to be faster than 4-wheelers. “Transportation and running e-buses may be within the city where charging infrastructure is built in the depot. We have depots in cities like Delhi, Bangalore and Mumbai. If they convert depots to EV-enabled, the problem can be solved,” he added.
However, Kamdar said that capacity expansion depends on 2-3 aspects. One is the availability of finance for small groups or newer start-ups.
“Besides, there is an issue of component supply. So you will require a very strong power train for e-bus. Battery used in e-bus is also different from 2-wheelers and 3-wheelers as it is not only used to run the vehicle, but also the AC. So load is pretty high and keeping that in mind, the power train is a key component in such vehicles. To make them, there is a semiconductor shortage globally,” he explained.
Another issue is price. Lithium metal prices have increased by 150-200 per cent in the last 3 months, since the Russia-Ukraine war. The costs are so high that there might be a case where someone must have quoted a price in the tender which they might not be able to meet any more, he added.