Challenges in adopting electric buses in India

Source: The post challenges in adopting electric buses in India has been created, based on the article “The private sector holds the key to India’s e-bus push” published in “The Hindu” on 28th October 2024

UPSC Syllabus Topic: GS Paper 2- Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Context: The article discusses India’s new PM E-DRIVE scheme, which funds electric buses. It highlights concerns over private bus operators being excluded from subsidies. It also mentions challenges like financing, charging infrastructure, and suggests innovative models like Battery-as-a-Service to promote private electric bus adoption.

What is the PM E-DRIVE Scheme?

1. The PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme aims to boost electric vehicle use in India.
2. It provides ₹4,391 crore for subsidies to help buy 14,028 electric buses in nine cities, focusing on strengthening public transport’s shift to electric vehicles (EVs).
3. Private bus operators are not included in the PM E-DRIVE scheme or other major national subsidy programs.
4. This exclusion raises concerns about scaling electric mobility beyond state-run buses, especially since private buses make up 93% of India’s total bus fleet.

For detailed information on PM E-DRIVE Scheme read this article here

What Are the Challenges in Adopting Electric Buses?

1. The International Council on Clean Transportation (ICCT) identifies financing as a major hurdle for private operators due to high upfront costs and uncertainties like battery life.
2. Despite electric buses being potentially more profitable over their service life, high interest rates, loan costs and low resale value make them less viable initially.
3. Charging infrastructure is another challenge, as most private operators cannot afford the high costs of land for charging stations.

For detailed information on Adoption of EVs: Challenges and Solutions read this article here

What Should be Done?

1. Offer Financial Support: Provide interest subsidies, longer loan tenures, and credit guarantees to reduce financial risks, as suggested by the ICCT.
2. Expand Charging Infrastructure: Set up shared charging stations in cities and on key highways to support private operators managing smaller fleets, given high land and power costs.
3. Implement Battery-as-a-Service (BaaS): Adopt BaaS to separate battery ownership from vehicles, lowering costs. Models like battery swapping and usage-linked leasing, seen in China, Kenya, and through Macquarie’s Vertelo in India, could boost private electric bus adoption.

What Are the Potential Benefits?

1. Reduces Fuel Costs: Electric buses reduce fuel costs for intercity travel, which serves 22.8 crore daily passengers and covers 57% of total ridership.
2. Supports Sustainable Routes: Around 40% of intercity trips fall within 250-300 km, fitting electric buses’ single-charge range.
3. Offers Long-Term Savings: Despite high initial costs, electric buses can be more profitable over time compared to diesel.

Question for practice:

Examine the challenges and potential solutions for scaling the adoption of electric buses in India as highlighted by the PM E-DRIVE Scheme.