These Companies are Critical to the Success of India's Electric Bus Revolution...

This morning I decided to please myself with a cheat breakfast from Zomato.

A few decades ago, if you told someone that someday you could wake up, click your smartphone a few times, and get your favourite food delivered to you; no one would have believed you.

But the food delivery industry has changed the scenario. After all, Zomato is not just famous for its quirky marketing.

In today's world, anything and everything people had thought to be impossible has become possible because of technology.

People never thought that vehicles would run on anything other than petrol. But ethanol blending and electric vehicles (EVs) have revolutionised the way people travel.

The change is not limited to a passenger vehicle. Experts say the opportunity in the electric bus segment is bigger than in passenger vehicles.

According to a BofA report, in the next two years, the value of the electric bus segment in India is expected to be US$2 bn.

The Indian government is planning to give an electric bus contract order for US$10 bn by 2030. Convergence Energy Services (CESL), a subsidiary of Energy Efficient Services (EESL), is expected to give out orders of 50,000 buses by 2030.

In this scenario, it becomes important to analyse how Indian companies have progressed in the electric bus segment.

Electric bus segment in India so far...

The electric bus segment is rapidly developing in India. In the previous financial year, electric bus sales have gone up by 1,250% which is quite high compared to 423% growth in two wheeler passenger vehicles.

Over 2,500 electric buses from over 10 Original Equipment Manufacturers (OEMs) are already running in India.

Various government initiatives like the FAME scheme, GST rate reduction, etc, have boosted the electric bus segment.

Under the FAME scheme, JBM Auto had bagged an order of 200 buses from Delhi Transport Corporation (DTC).

In September 2021, JBM Auto said it would supply electric buses for Bengaluru Metropolitan Transport Corporation (BMTC).

The electric bus segment is highly competitive. The existing experienced players and the innovative emerging players, are all trying to make the most of the opportunities.

Olectra Greentech is a group company of Megha Engineering and Infrastructure. It is a new player in the EV industry, and has taken everyone by surprise with its performance.

In July 2022, Olectra Greentech received an order from its sister concern, Evey Trans (EVEY) for 300 buses. EVEY received a Letter of Award (LoA) from the Telangana State Road Transport Corporation (TSRTC).

Olectra Greentech will also maintain these buses. The buses will be delivered in 20 months.

Another new but strong player in the electric bus segment is PMI Electro Mobility. PMI Electro Mobility already has 23 buses running in Rajkot, Gujarat.

Don't try to search for the script because it's unlisted.

In July 2022, it received an order for 100 buses from Rajkot Municipal Corporation. It set up Rajkot's first electric bus depot, which was inaugurated a week ago by Bhupendra Patel - Chief Minister of Gujarat.

The bus depot is spread over 17,000 sq. meters and has 14 DC fast chargers. Together, Olectra Greentech and PMI Electro Mobility run about two thirds of the electric bus segment.

Other players in the EV bus industry...

Whenever we talk about EVs, it is impossible to not mention the Tata group. The Tata group has dived head first in to the EV industry.

Today, the Tata group is critical to India's EV success. The Tata group is driving India's EV revolution by continuously evolving and staying ahead of the competition.

Right from manufacturing passenger EVs to installing a charging station in India, the Tata Group is leading all EV-related businesses. So it should not surprise you that Tata Motors is excelling even in the electric bus segment.

Tata Motors has already bagged an order of 5,500 buses. The order was received in response to the tender issued by the state-owned CESL. According to reports, Tata Motors has 10% share of the electric bus segment.

Another incumbent in the EV space, Ashok Leyland, was rumoured to be lagging in the electric bus segment.

But on 19 August 2022, Switch Mobility, a subsidiary of Ashok Leyland ended all the rumours, when it came out with game-changing news.

The Game Changer

On 19 August 2022, Nitin Gadkari, minster of Road Transport & Highways, unveiled the first electric double-decker bus in India.

Switch Mobility manufactures these buses. It is said to be the world's first - semi-low-floor, air-conditioned, electric double-decker bus with a wider door on the rear overhang and a rear staircase.

It has double the capacity of normal single-decker buses, with just an increase of 18% in weight. It can accommodate 66 passengers. Hence, 20 of these buses can accommodate passengers equal to 32-38 cars.

Take a look at the astonishing image below:

The buses will be supplied by Switch Mobility to BEST. It has already received an order of 200 buses for starters. Hence, Mumbai will get back its iconic double-decker buses, in fact, better buses.

Switch Mobility is in talks with other cities to supply such buses.

These buses will replace the existing diesel-running double-decker buses. The exiting buses were difficult to maintain and had high costs.

Switch Mobility is already running successful buses like this in the United Kingdom (UK). Hence, these buses are expected to do well in India too.

Thus, these dashing double-decker electric buses may change the Indian electric bus segment.

Investment Takeaway

EVs and its entire supply chain industries will boom in the upcoming era. There is no rocket science here. After all, EVs come with dual benefits...they are both environmentally friendly and cheap.

Moving from diesel and gas running bus transport to electric ones is easy. The BofA report says,

• "The EV shift in intracity transportation is feasible, given predictable routes, ease of setting up charging at depots, and the running cost of sub-Rs 10 per kilometre versus 25-35 per kilometre for CNG and diesel bus variants."

Hence there is a high possibility that all buses in the future will be electric. But to be able to run this entire electric bus segment is no joke.

Large scale technology, infrastructure, and manpower will be required to make this switch from diesel/gas to electric buses into a reality.

Whenever there is an opportunity for high growth, there is also a threat of high risk. Both, emerging and existing EV players will benefit from the EV opportunity.

But investors will have to analyse very carefully which company is actually developing along with the market and which company is just wasting its resources.

Happy Investing!

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