Private stage carriage bus operators across the country ferry 150 million people daily! With a majority of them operating in the non-urban sector, these operators provide critical and affordable public transport linkages across the regions. However, the rising fuel (diesel/ CNG) prices significantly threaten their current business.

This issue brief finds that non-urban e-bus operations are more profitable than diesel bus operations over the duration of the life of the bus. It highlights that the high cost of finance remains a major deterrent to e-bus adoption. Additionally, other concerns like limited e-bus designs, its robustness and longevity, lack of charging infrastructure, and poor know-how of the maintenance ecosystem are highlighted by operators.

Key Highlights

• Under prevailing loan conditions, 95 per cent of e-bus owners will face significantly higher challenges than diesel bus owners, during the loan repayment period of 4-7 years.
• Mofussil routes, less than 120 km across the plains (terrain), are profitable for standard 12 metre (12m) long and midi 9 metre (9m) AC e-buses.
• Longer routes (greater than 120 km) are not profitable for operating e-buses if vehicle utilisation is less than 400 km per day. Current bus models’ battery capacities are insufficient for longer route lengths.
• Both mofussil and long hilly routes are profitable for 9m e-bus operations. E-buses on hilly routes have significantly lower cost per km (CPKs) than diesel buses, due to downhill regenerative braking.
• For the uptake of e-buses in the private bus sector, the study recommends incentivising through interest rate subvention at 4-6 per cent for a loan term of seven years and hypothecation of e-buses. It also recommends creating leasing markets for e-buses by nudging financers, Non-banking finance companies (NBFCs) and other banking institutions.