There’s a new electric vehicle (EV) battle emerging quietly in the country on a new front, far removed from the world of Ather and Ola Electric—buses. Strategies are being laid out, funding is being raised and government tenders are coming in left, right, and centre. But unlike the two-wheeler and three-wheeler segment, the battle for electric bus supremacy is mostly between the big guns.
At its centre is bus behemoth Ashok Leyland. The 74-year-old company is the world’s third-largest bus maker, with a market capitalisation of Rs 34,551 crore ($4.54 billion) and a dealership network spanning over 50 countries. In February, the Hinduja Group-led company completed the sale of its existing EV business to its EV arm Switch Mobility for Rs 240 crore ($31 million).
Ashok Leyland formed Switch in April 2021, combining its electric commercial vehicle operations with that of British bus manufacturer Optare. Optare is majority-owned by Ashok Leyland.
Switch’s raison d’etre is to produce “net-zero” carbon buses and light commercial vehicles (LCVs). The company is in the final stages of raising $200 million at a valuation ranging between $1.4 billion and $1.8 billion to fund its capital expenditure plans. Already, it has bagged state orders to supply 40 buses in Chandigarh and 300 in Bengaluru, and is eyeing many more tenders.
Switch is beginning to walk through the doors of what could very well turn out to be one of the world’s largest e-bus markets. According to a report report Niti Aayog Status quo analysis of various segments of electric mobility and low carbon passenger road transport in India Read more by German development agency GIZ and Indian think tank Niti Aayog, 515,600 EVs were sold in India in 2020. The share of e-buses in that lineup is pitifully minuscule—only 600. However, the numbers are estimated to touch 1,000 this year and nearly double by next year, estimates Hemal N Thakkar, director of ratings agency CRISIL.
Other pieces are falling into place, as well. Cities have set up electrification targets—Mumbai and Bengaluru, for instance, are targeting 100% electric bus fleets by 2027 and 2030, respectively. The Indian government’s Rs 10,000 crore ($1.32 billion) flagship EV policy—Faster Adoption and Manufacture of (Hybrid &) Electric Vehicles (FAME-II)—has set aside subsidies towards supporting e-bus adoption in the country. By 2025, ratings agency ICRA expects e-buses to account for 8-10% of all new bus sales.
Certain things have changed, however. The government is keen on electric mobility as a service (eMaaS), where the companies own and operate the buses for their customers. eMaaS has emerged as one of the key pillars of India’s electric mobility transition, as both customers and operators seek maintenance, fleet management, and charging optimisation services for the EVs’ life cycles.