EV Initiative Lacks Support for Private Bus Operators: Report

New Delhi, Oct 28 (KNN) In a decisive step toward realising India’s climate goals, the Union Cabinet recently approved the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme.

The program allocates Rs 4,391 crore in subsidies to support the procurement of 14,028 electric buses across nine major cities.

While the initiative aims to strengthen the shift toward electric vehicles (EVs) in the public transport sector, private bus operators remain excluded from these subsidies, raising concerns about the potential to scale electric mobility beyond government-operated buses.

Electric bus adoption in India has largely been led by State-run enterprises. Earlier schemes, such as FAME I (2015-19) and FAME II (2019-24), provided financial support for purchasing electric buses, with over 7,500 public buses receiving subsidies.

However, public transport buses account for only 7 per cent of India’s 24 lakh registered buses, leaving 93 per cent of the bus fleet—operated by private firms—untouched by government schemes.

While companies like NueGo and Chartered Speed have begun experimenting with electric buses, private-sector deployment remains limited due to high costs and financing barriers.

This has sparked concerns among industry experts about the government's ability to meet its target of replacing 8,00,000 diesel buses with electric models by 2030.

A report by the International Council on Clean Transportation (ICCT) highlights several financial hurdles preventing wider adoption of electric buses in the private sector.

High upfront costs, limited financing options, and uncertain battery life make electric buses less viable for private operators. Additionally, high interest rates and short loan tenures increase financial strain during the repayment period, despite the long-term profitability of electric buses.

Another major challenge is the lack of accessible charging infrastructure. FAME-funded facilities are primarily available at State transport depots, and 90 per cent of private operators manage small fleets, making it economically difficult to invest in independent charging stations. Issues like high land costs and power supply limitations further complicate adoption.

To overcome these barriers, experts suggest building shared public charging infrastructure along key highways and within cities. State governments could facilitate this by offering fiscal incentives or inviting tenders based on design-build-operate-transfer (DBOT) models, ensuring minimum energy use guarantees to attract private investments.

Emerging solutions like Battery-as-a-Service (BaaS)—which separates battery ownership from the bus—have the potential to ease the financial burden on private operators, as seen in China and Kenya. Additionally, battery-swapping models and usage-based leasing platforms could boost adoption.

As India’s electric bus market evolves, scaling private-sector participation will be key to meeting the ambitious 2030 target. Expanding the PM E-DRIVE scheme to include private operators, along with financing incentives and robust infrastructure development, will be essential to ensuring that electric mobility extends beyond the public sector.

(KNN Bureau)