E-bus adoption impacts charging infra, delayed deliveries

 E-buses entail higher upfront purchase costs (including subsidies and financing requirements) compared to diesel and compressed natural gas (CNG) buses.  
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MUTHUGANESAPANDY M

Even as the government has been consistent with policy bush to boost the adoption of electric buses (e-buses), their adoption has been adversely impacted due to lack of charging infrastructure, delayed deliveries and exclusion of the private sector, said India Ratings and Research (Ind-Ra).

While e-buses offer compelling advantages in terms of lower operating costs and environmental impact, Ind-Ra pointed out adding, their adoption has been impeded by challenges such as inadequate charging infrastructure, exclusion of private electric bus operators from major schemes, and delayed deliveries of e-buses by original equipment manufacturers (OEMs).

“As per industry estimates, India has less than one-third of EV charging stations compared to total fuel refilling stations. Furthermore, majority of the government policies have been focused on state transport undertakings (STUs), which operate only 5-7 per cent of the total buses registered in India, and have been witnessing significant losses, declining fleet size and low fleet utilisation,” it added.

This poses the risk of delayed payments, restricting the enhancement of electric fleet size. While the risk is mitigated to a large extent by the gross cost contract model along with the payment security mechanism scheme of the government, the inclusion of private bus operators is imperative for the segment to grow rapidly, the ratings agency feared.

Delayed deliveries

Furthermore, e-bus deliveries in India have been slower than expected, primarily due to supply chain bottlenecks, the agency emphasised.

“The top five OEMs together hold an order book of more than 25,000 e-buses to be delivered over the next one-to-two years. However, the industry has noted delays in servicing these orders on account of supply chain issues, including dependence on imports for some of the critical components and essential minerals,” it pointed out.

Major OEMs have reported shortages of key components such as batteries, chassis, and powertrains, many of which are imported, causing delays in production, Ind-Ra said.

Additionally, the lack of alternate indigenous suppliers of crucial parts further constrains the ability to fulfill large orders quickly. India is developing local manufacturing capacities for batteries, with significant investments coming in; however, the same could take some time, it added.

Going ahead

Despite challenges, Ind-Ra expects the share of e-buses in overall new bus sales in India to increase to 10-12 per cent by FY27, from levels of 5 per cent in FY25.

“This would be driven by the government’s thrust to decarbonise India’s road transportation sector, a supporting policy framework, and the total ownership cost of e-buses being more feasible compared to internal combustion engine vehicles,” it noted.

However, the gaps in charging infrastructure, supply chain issues, and the exclusion of private operators from the subsidy scheme would continue to pose key challenges in the near term, it warned.

“Nevertheless, e-bus adoption is likely to grow rapidly in the medium-to-long term, backed by a strong order book, supportive policies, and the low penetration of buses in India,” Ind-Ra added.

Currently, e-bus deployment is largely confined to cities such as Delhi, Mumbai, Bengaluru, Ahmedabad and Lucknow. Under the initial phase of the PM E-DRIVE scheme, the buses have mainly been deployed in these five cities, in view of high vehicular traffic and severe pollution levels.

However, considering the government’s plans to expand e-bus presence in tier-2 and tier-3 cities gradually, the scope for e-bus deployment will increase manifold.

E-buses entail higher upfront purchase costs (including subsidies and financing requirements) compared to diesel and compressed natural gas (CNG) buses.

However, given their lower cost of operation, the total cost of ownership (TCO) of e-buses is lower than that of diesel and CNG buses. Moreover, CNG availability is largely restricted to major cities in India, and also, developing charging infrastructure for e-buses is much easier compared to setting up CNG stations, Ind-Ra stressed.

Published on November 10, 2025