India Sets Ambitious Target of 38,000 Electric Buses on Roads by 2027

To make sure the plan for 38,000 electric buses moves forward smoothly, India and the US have come together to create a joint fund, known as the payment security fund.

The Indian government expects to introduce 38,000 electric buses by 2027 as a result of the US-India payment security system, which is projected to provide EV Bus OEMs with the necessary cushion to deploy these buses to various state transport undertakings.

The essential takeaway here is that this system serves as a safety net. If state transportation services are unable to pay their bills, the security mechanism steps in to cover the payments. This is a significant move because a tender issued in January 2023 under the National Electric Bus Programme (NEBP) Phase-II faced challenges.

Many commercial vehicle manufacturing companies were hesitant to bid on leasing 4,675 e-buses since there was no payment security system in place to guarantee their payments if state transportation agencies failed to meet their financial commitments.

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To make sure the plan for 38,000 electric buses moves forward smoothly, India and the US have come together to create a joint fund, known as the payment security fund. This fund will be used to acquire the remaining electric buses under the NEBP. Dr Hanif Qureshi, Additional Secretary at the Ministry of Heavy Industries, shared this information.

Dr. Hanif Qureshi emphasized, "When our Prime Minister met with President Biden in the United States, they discussed electric buses. India and the United States have agreed to support the growth of electric buses in India to reduce carbon emissions in public transportation. They've decided to establish a joint fund called a payment security fund, which will be used to purchase electric buses and secure them for the next 10 to 12 years."

Currently, as part of India's bus aggregation program, the state-run Convergence Energy Services Limited (CESL) has aggregated 12,000 electric buses out of the overall goal of 50,000.

India's state transport services are facing challenges with older buses, financial losses, and low occupancy rates. Across the country, estimates from the road transport ministry suggest that 56 state transport services have suffered a combined loss of Rs 17,000 crore.