MHI Approves Subsidies For 9,800 E-Buses in Bengaluru, Hyderabad

India is also working on same but subsidy for 9800 Electric buses is approved under PM E-Drive for Bengaluru and Hyderabad by the Ministry of Heavy Industries(MHI) is a big step towards the journey of sustainable public transport. This allocation covers up to 70% of government’s estimate to facilitate procurement of 14,028 e-buses for nine metro cities by FY26.

Prominent Authorizations Under the PM E-Drive Scheme

The government has approved subsidies for:

• 7,000 e-buses in Bengaluru
• 2,800 e-buses in Hyderabad

Such an e-bus subsidy allocation with an outlay of ₹4,391 crore accounts for nearly 40% of the total ₹10,900-crore PM E-Drive scheme, rendering it to be the scheme’s biggest element.

The MHI is also waiting for demand certificates from other cities for further allotments. States still need to send demand certificates and also accept the Direct Debit Mandate (DDM) requirement, which is still pending in some cases for approval, added a senior official.

How Can E-Bus Manufacturers Get Paid?

PM e-Bus Sewa Payment Security Mechanism (e-PSM)Protecting the e-bus manufacturers, funding has been inducted through the DDM (Direct Debit Mandate). In this system, the public transport authorities are required to make deposit guarantees with the Reserve Bank of India (RBI) If payments are in arrears for more than 90 days, the MHI can call on these guarantees, guaranteeing manufacturers´ payments.

Coordination between PM E-Drive and e-PSM

Launched in September 2024, both the PM E-Drive and e-PSM schemes are being administered in tandem to facilitate the smooth rollout of e-buses and release of subsidies. The PM E-Drive scheme originally included subsidies for these cities:

• Delhi
• Mumbai
• Pune
• Ahmedabad
• Surat
• Kolkata
• Chennai

As per PM E-Drive scheme notification, the highest subsidy per e-bus is between ₹20-35 lakh.

November 21, 2023 — David E. Dutch, in an episode of @kingspe` with kingspe.com

Even as the government’s approval is a move forward, experts have pointed to challenges in the large-scale deployment of e-buses. Challenges could come in the form of supply chain constraints for e-bus batteries and an acute shortage of skilled manpower to drive these buses.

“The bus industry’s transformation relies heavily on battery supply from Chinese suppliers, causing concern in the industry as many cities are shifting entire fleets to electric buses. Batteries for E-buses are much larger when compared to the two- and three-wheelers. Moreover, the new mode of transport will also need trained personnel for integrating these new vehicles into urban transport systems,” said T. Surya Kiran, Executive Director, Association of State Road Transport Undertakings (ASRTU).

GCC model — e-buses are operated by conductors from public transport authorities and manufacturers provide drivers. “Drivers need special training to handle the sophisticated technologies in electric buses,” Kiran said.

Concerns over China’s dominance in battery supply

As per implicit concerns about the impact of the dominance of China on the global electric vehicle battery supply chain, highlighted in the FY25 Economic Survey. The company’s primary field of business is the manufacture of lithium-ion batteries, which are the primary source of power for e-vehicles, which are estimated to grow at a CAGR of 23% by the year 2030.

“The absence of viable alternative battery technologies continues to give China a stronghold over the lithium ion battery market,” Chief Economic Advisor (CEA) V. Anantha Nageswaran said in the survey. China’s control over the supply of critical minerals also generates long-term dependencies for countries such as India, he added.

Increased Infrastructure for Public Transport

Govt FY25 Economic Survey also highlighted e-Mobility as a key pillar in India’/s energy transition strategy. It highlighted the need for national and local policies to prioritize public transportation over private vehicles.

Only 37 percent of India’s urban population has convenient access to mass transit, according to the survey, compared with more than 50 percent in Brazil and China. The survey urged an increase to whom public transport serves to address this gap and reduce dependence on foreign sources, which is reportedly in line with India’s net-zero carbon emission objectives.

As we now put subsidy approvals behind us, it will also be pertinent for the industry to focus on infrastructure preparedness covering on-road charge points, batteries supply chain solutions, and driver training programs to enable seamless adoption of electric buses in India’s urban transportation grid.

Source - Livemint