JBM Group, a leading manufacturer of auto parts and electric buses, anticipates a significant increase in the demand for electric buses within the State Transport Utilities (STUs) segment, projecting around 150,000 units by 2030.
In the fiscal year 2024, sales of electric buses surged by 79%, with a total of 3,607 units sold, primarily driven by public sector entities, including state transport undertakings (STUs). The segment is expected to experience rapid growth, supported by numerous allocations from various tenders.
In 2023, states such as Maharashtra, Karnataka, Jammu and Kashmir, Telangana, and Gujarat led the demand for electric buses, together contributing nearly 41% of the nation’s new e-bus additions, as highlighted in JBM Auto’s latest annual report. JBM Auto predicts that the demand for e-buses within STUs will reach around 150,000 units between 2024 and 2030, aligning closely with the government’s target of 200,000 buses. Currently, there are approximately 4,000 electric buses in operation across India.
Indian cities predominantly use net cost contract (NCC) and gross cost contract (GCC) models, along with the owner-operator model. The GCC model, where the operator is responsible for procuring e-buses and setting up charging infrastructure, reduces the need for significant upfront capital investment by STUs. Operators are compensated based on the kilometers their buses travel.
JBM Auto estimates that the total cost of ownership (TCO) for e-buses is about 15-20% lower than that of internal combustion engine (ICE) buses over a 15-year lifespan, with a breakeven point at around six years. Although e-buses currently have higher upfront costs compared to diesel or CNG buses, these costs are expected to decrease as manufacturers improve efficiency, localize production, and optimize battery expenses.
To support the adoption and sustainability of a business model for private players, the government has introduced a Payment Security Mechanism (PSM) that ensures timely payments to e-bus operators and OEMs by state governments. This mechanism is similar to the model used in the renewable energy sector, according to Nishant Arya, Vice Chairman & Managing Director of JBM Auto.
Arya emphasized JBM Group’s strong position in the Indian e-bus market, noting that the company’s order book remains robust with new contract wins. JBM Ecolife Mobility, a subsidiary of JBM Auto, secured a contract from Convergence Energy Services Limited (CESL) under the PM e-Bus Sewa scheme to operate 1,390 e-buses at a cost of ₹7,500 crore. Additionally, Arya stated that JBM Auto plans to roll out an additional 3,000 e-buses in FY25.
JBM Electric Vehicles, another subsidiary of JBM Auto, has signed an agreement with MUON India, a Macquarie Group company, to deploy over 2,000 electric buses for MUON over the next few years. JBM Auto, with a valuation of ₹5,009 crore, has established an electric bus manufacturing facility in the Delhi-NCR region, with the capacity to produce up to 20,000 e-buses and special-purpose vehicles.
