Indian Banks are reluctant to e-bus (electric bus) makers for supply to ailing state transport operators over concerns about the recovery of dues, hurting the goal of the country of reducing vehicle emissions, sources said. The lack of funds limits the ability of electric-bus makers to participate in federal govt. tenders to supply to states, sources said, threatening to slow the electrification of major public transport now dependent on diesel.
According to the senior bank official, it was risky to lend to manufacturers to build buses for the so-called STUs (State transport undertakings), as many are in bad financial condition because they are often forced to keep low fares.
The lack of funds limits the ability of electric-bus makers to participate in federal govt. tenders to supply to states
Each e-bus costs Rs. 1.25 crore, about 5 times that of a diesel bus. Financing diesel buses are safer because, in case of any default, banks can repossess the asset and easily redeploy it. However, electric buses need charging and other infrastructure that may not be available everywhere, a source said.
India wants to deploy fifty thousand electric-buses tranches over the next 4-5 years at an estimated cost of Rs. 1 lakh crore. As of now, 6,740 electric buses have been approved by the federal govt. that provides incentives for associated infrastructure, of which nearly a third have been deployed in states.
Electric buses need charging and other infrastructure that may not be available everywhere
The chief executive of electric bus maker switch mobility Mahesh Babu said that most of the contracts related to state transport undertakings are seen by banks as high-risk and known for payment security for bus makers. State transport undertakings officials of North India stated that ‘There have been no instances of default in India though there are delays.’ He added a payment security mechanism may still confidence among leaders.
According to the source, PMI Electro, JBM Auto, Switch Mobility, and the EV arm of the truck maker Ashok Leyland responded to the latest tender. However, notable expectations were from Tata Motors, India’s largest commercial vehicle manufacturer, and Olectra Greentech, the Indian technology partner of Chinese automaker BYD (Build Your Dreams). They would consider the demands of the industry.
However, the govt. run Convergence Energy Services Ltd., which aggregates demand from states for e-vehicles, issued a tender to procure 6,450 electric buses- the country’s largest so far. The road transport sector accounts for 13 percent of carbon emissions in India. Buses are the most significant modes of transportation in India and state transportation undertakings operate 150,000 buses that carry 70 million passengers every day.