“India’s 50,000 electric bus plan received ‘thumbs up’ praise from the United States.” HTAuto, an automotive industry website owned by the Hindustan Times, reported on the 11th that the U.S. government and the private sector expressed their recognition of India’s decarbonization plan with a “donation” at the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28).

As of May this year, only 1.25% of the buses registered in India were electric buses, indicating huge market growth potential in the future. As an important player in the Indian electric bus market, Chinese manufacturers have made efforts to occupy the market. However, issues such as arrears and trade protectionism are pitfalls that Chinese companies should be careful to avoid when operating in India.


US and India join forces

India's plan to put 50,000 electric buses on the road by 2027 has received support from the United States. Bloomberg reported on the 10th that at a COP28 side event, Indian and US officials said that the Indian government, the US government and private companies would provide US$240 million and US$150 million respectively to help India achieve its goal of 50,000 electric buses. John Kerry, the US Presidential Special Envoy for Climate Issues, said this is what the US and India need to do to meet the challenge of decarbonization.

India’s Economic Times reported in September that Eric Garcetti, the U.S. ambassador to India, said on the social media platform He announced at the time that the two countries would launch a plan to deploy 10,000 Indian-made electric buses on the streets of Indian cities.

According to reports, the two countries will jointly raise funds for 10,000 electric buses in India. This is a common vision reached by Indian Prime Minister Modi and US President Biden when he visited the United States. According to a statement issued by the U.S. Embassy in New Delhi, India, the investment in the electric bus will be made through a new secure payment mechanism, which can reduce financial risks and will continue to protect green investments in both countries in the future.

Reuters reported in August that the Indian government approved a nearly 580 billion rupee (approximately 50 billion yuan) plan to deploy 10,000 electric buses as well as charging equipment and other related infrastructure in 169 cities within 10 years. This is also part of India’s 50,000 National Electric Bus Plan (NEBP) promulgated in 2022. After the release of this plan, the Indian government has been summarizing the needs of various state governments, publishing contract and bidding information, and inviting companies to bid. The Economic Times reported at the time that Convergence Energy Services Ltd, a wholly-owned subsidiary of India's state-owned enterprise Energy Efficiency Services Ltd., was responsible for purchasing electric buses.

Currently only 1.25%

The P&S Intelligence website, a world-renowned data survey agency, reported that British Optare, Poland's largest bus company Solaris Bus Company, China's BYD and other companies are manufacturing electric buses in India. Bhupender Yadav, Minister of Environment of India, said that decarbonization of public transportation is a basic component of achieving greenhouse gas emission reduction and is the basic path for India to achieve its zero-emission goal in 2070. BYD data shows that as of the end of March 2019, BYD electric buses have helped India reduce carbon dioxide emissions by a cumulative 1,048 tons.

However, promoting electric buses in India is not an easy task. Reuters reports that as New Delhi provides financial support for green public transport, public bus manufacturers have expressed concerns about previous delays in payment of fees by India's state-owned transport company. Indian banks are reluctant to provide loans to electric bus manufacturers out of concerns that arrears may not be repaid, sources said. The inability to obtain loans limits the ability of electric bus manufacturers to participate in tenders.

Currently, India is said to have 12,000 electric buses, but there are doubts about this number. "SustainableBus", a website that focuses on clean buses and sustainable development in the field of public transportation, reported that as of October 30, of the 7,090 electric buses approved for subsidies by the Indian government, only 2,435 were on the road. The annual deployment of electric buses in India has increased from 526 units in fiscal year 2020 to 1,905 units in fiscal year 2023. Based on this calculation, the number of electric buses in India should be less than 12,000.

According to data from the website of the Institute of Energy Economics and Financial Analysis, as of May 2023, there are approximately 359,000 registered buses in India. Since the launch of the electric vehicle manufacturing project in April 2015, there are currently only 4,506 electric buses, accounting for only 1.25% of all buses.

Opportunities and Risks

The SustainableBus website reports that demand for electric buses in India is growing, driven by government subsidies. The latest data from ICRA Limited, an Indian investment information and credit rating agency, shows that by 2025, the proportion of electric buses in India's new bus sales is expected to account for 11%-13%. The huge demand in the Indian electric bus market not only brings opportunities to Indian companies, but also provides opportunities to overseas companies including Chinese electric bus manufacturers.

As early as 2013, electric buses produced by BYD appeared on the streets of India. Currently, BYD electric buses are available in many cities such as Mumbai and Bangalore in India. A reporter from the Global Times once experienced a BYD bus in Hyderabad, India, and was praised by passengers for its comfort. Earlier this year, the Indian government once again purchased 1,000 electric buses from BYD, which is currently BYD's largest overseas electric bus order.

At the same time, the increasing dominance of Chinese electric bus manufacturers in the Indian market has caused "concerns" among some Indian companies. "Fortune India" reported that among the 1,919 vehicles sold in fiscal year 2023, Indian electric bus manufacturer PMI ElectroMobility became the leader with a market share of 31.47%, and another Indian electric bus manufacturer Olectra Greentech occupied 23.14% of the market share. The two companies each have a Chinese partner, PMI ElectroMobility with Beiqi Foton Motor Co., Ltd., and Olectra Greentech with BYD, China's largest electric vehicle manufacturer.

Sudhir Mehta, founder of an Indian electric bus startup, told Fortune India that India's growing dependence on Chinese bus manufacturers is fraught with "potential risks." He believes that the Indian government, as a tender participant, should control the tender results and support local electric vehicle manufacturers until Indian manufacturers create a strong local supply chain.