Seven-Year Switch: 800,000 Buses To Go From Diesel To Electric

In a significant green move, the government plans to replace 800,000 diesel buses—about one-third of all buses on the roads—with EVs in the next seven years. In addition to reshaping India's public transportation, this initiative is poised to significantly benefit the environment, give a powerful impetus to India's electric vehicle (EV) industry and yield several other spinoff benefits.

According to government insiders, the strategy is to roll out 200,000 electric buses for state transport undertakings (STUs), 550,000 for private operators, and 50,000 earmarked for schools and employee transportation by 2030—a real game-changer!

The plan aligns with the broader Faster Adoption and Manufacturing Electric Vehicles (FAME) incentive programme, which hit the roads in 2015 and received funding of Rs 10,000 for three years starting in 2019. The scheme is now cruising towards its official deadline in March 2024.

In its iteration as FAME 111, the scheme is expected to include several additional sops, such as production-linked incentives (PLI), to accelerate the adoption of EVs and charge up the industry.

Beyond environmental benefits, the transition to electric buses is expected to fast-track the development of charging infrastructure, attract investments, achieve economies of scale, lower per-unit costs, and generate employment within the manufacturing sector.

Estimates suggest a capital investment of Rs 1.2–1.5 trillion may be required to roll out 100,000 electric buses at current prices. Government officials are in talks with stakeholders to finalise the scheme's details, with a potential unveiling in the next financial year.

Discussions are centred around aggregating and converting demand through large procurement tenders, aiming to drive down costs per unit and streamline distribution to existing transporters. Approximately 4,000 electric buses operate on Indian roads, a modest number compared to the 2.3 million diesel and CNG buses.