Electric Bus Demand In India Expected To Thrive In FY25 Supported By Govt Initiatives

The increasing demand for electric buses in major Indian cities is expected to push the growth of commercial vehicles moving forward

The demand for electric buses is projected to remain strong in the coming years, driven by increasing emphasis on cleaner transportation systems and various governmental initiatives, according to a report released on Wednesday. 

Last year, the government introduced the PM e-bus Sewa Scheme, earmarking a significant $2.4 billion for the deployment and operation of 10,000 electric buses across 169 eligible cities through a public-private partnership model. These environmentally friendly vehicles are scheduled to start operations in 2024, with full deployment expected by 2026. CareEdge Ratings' report highlighted substantial growth in the electric vehicle (EV) segment between FY21 and FY24 despite its smaller share in overall commercial vehicle (CV) sales.

“Key indicators of this growth include increased adoption rates and a rising market share, aided by the gradual expansion of the EV infrastructure. Notably, this transition to EVs is particularly evident in the e-bus and light commercial vehicle (LCV) categories,” the report said.

In FY24, registrations of electric heavy passenger vehicles (e-HPVs), particularly large electric buses, saw a substantial surge. The number of registrations soared from just 217 units in FY21 to 3,400 units in FY24. Similarly, registrations of electric light passenger vehicles (e-LPV) surged from 360 units to over 10,500 units during the same period, as highlighted in the report. 

The increasing demand for electric buses in major Indian cities is expected to push the growth of commercial vehicles moving forward.

The rise in demand for electric buses across India stems from several factors, including rapid urbanisation driving the need for sustainable and eco-friendly public transportation systems, growing environmental consciousness, high oil import expenditures attributed to diesel vehicles, advancements in technology, and enhancements in battery charging infrastructure. 

Additionally, the Indian government has introduced various initiatives to encourage electric mobility, such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme and the National Electric Mobility Mission Plan (NEMMP).