Anybody who takes buses in a city like Gurugram knows how many of them belch out clouds of smoke. But all that could change soon and local residents might be breathing cleaner air. The government plans to roll out electric buses (e-buses) in Gurugram, Kolkata, and Kochi as part of its smart cities programme in a bid to promote shared mobility and counter pollution.

As the government steps on the e-bus gas, it is reaching out to the private sector for partnerships to help pump in cash under its programme to promote electric mobility called the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (FAME) scheme. As part of this policy, the government is offering an up to 60% subsidy to companies and state governments interested in buying e-buses.

Delhi Transport Corporation chairman and managing director Manoj Kumar said there is a significant opportunity for India to explore partial privatisation of the sector.

“With the cost of renewable energy falling below that of gas for the first time, many companies are expected to produce renewable energy in the next decade. Electric vehicles will supply the basic transportation needs of India’s future smart cities,” said Kumar.

The private sector’s response has been positive so far. China’s top-selling electric vehicle maker, BYD, has tied up Hyderabad-based Goldstone-BYD to make e-buses. According to a report in The Economic Times, Adani Enterprises is also planning to enter the e-buses manufacturing business. “It is still in the early ideation phase. Details will be out as we finalise things,” an Adani Enterprises spokesperson said.

Electric mobility experts believe e-buses and eco-friendly mobility are the way to go for smarter cities. Already, Kolkata, Kochi, and Gurugram are gearing up for 80, 16 and 100 e-buses on their roads in a month.

“Electric makes a fair amount of sense for any fleet, but e-buses have more viability. A taxi may have a good day or a bad day, but it is not so with buses. The main point about smart cities is to draw new capital, which involves changing the way we look at our existing resources,” said Rahul Tongia, Brookings India Fellow, Cross-Brookings Initiative on Energy and Climate. “A depot is not only where we park buses, but they can also provide the charging infrastructure.”

Experts see massive potential in e-buses. According to a recent research report by global strategic research and consulting services provider P&S Market Research, the Indian e-bus market is projected to grow at a CAGR of 38% to 4,056 units by 2025. Even though the figure is low compared to the global e-bus market projection of 331,327 units by 2025, industry is pushing for faster adoption.

“The reduction of the cost of renewable energy is a huge factor as it could permit sustained use of electric vehicles without reliance upon subsidies. The important thing for policy-makers to remember is that in India, nine out of 10 people use public transport daily,” said Chetan Maini, managing director, Sun Mobility India, which designs innovative solutions for electric vehicles.

But there are challenges ahead. The limited availability of charging stations and lack of proper infrastructure is a major roadblock.

Experts believe many of these problems will be resolved when the government unveils the second phase of the electric mobility policy. The draft of the FAME II policy, expected to be announced in September, is likely to provide incentives for bulk purchase of batteries for a fleet of above 50 buses under the Smart City initiative.

“FAME I didn’t quite meet its expectations. Hopefully, FAME II will allow more options and flexibility,” said Tongia.

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