The Growing Demand and Supply Challenges for Electric Buses in India’s Private Intercity Market

The Growing Demand and Supply Challenges for Electric Buses in India’s Private Intercity Market

India is on a mission to transform its public transportation system by shifting to electric buses, aiming to electrify 40% of the country’s buses by 2030. This ambitious goal is part of broader efforts to curb pollution, reduce operational costs, and modernize both intercity and interstate travel. However, while government-backed initiatives like the PM e-Bus Sewa Scheme have been successful in driving large-scale adoption, private intercity bus operators are facing significant hurdles due to supply constraints.

Surge in Government Orders Disrupting Private Operators

The demand for electric buses is skyrocketing in India, especially driven by governmental policies aimed at green mobility. By 2024, public transport authorities across the country had placed over 20,000 electric bus orders. For example, JBM Ecolife Mobility, a subsidiary of JBM Auto, secured a staggering order of 1,021 electric buses worth around Rs 5,500 crore to be deployed across Gujarat, Maharashtra, and Haryana.

Switch Mobility, another prominent player, has secured 1,900 orders, with plans to deliver them over the next 18 months. According to the company's CEO, Mahesh Babu, government incentives and a shift toward electric buses as a more viable option than diesel vehicles are major factors driving these substantial orders. However, the overwhelming focus on large government contracts is creating a bottleneck for private fleet operators.

Private companies like NeuGo, FreshBus, and LeafyBus, which operate fleets of electric buses on intercity routes, have seen delays in receiving their orders. LeafyBus, for instance, placed an order for 200 electric buses, but the delivery schedule is slow, with only two buses arriving every 12 to 15 days. This slow pace of delivery means it could take up to a year for the company to receive its entire fleet.

Struggling to Meet Private Demand

The supply chain for electric buses is still in its nascent stages, which adds to the delays. Unlike internal combustion engine (ICE) buses, which benefit from an established ecosystem and faster production timelines, electric buses require newer processes for homologation (official approval), leading to significantly longer delivery timelines. Traditional ICE buses can be delivered within 6 to 8 weeks, while electric buses might take anywhere between 6 months to a year to be delivered after placing an order.

Despite these challenges, there is optimism that new entrants in the OEM space will help alleviate some of the pressure. LeafyBus, for example, believes that once these new manufacturers scale up, the supply gap will narrow, improving the lead time for private operators.

Private Operators Are Embracing Electric Buses

The private intercity electric bus market in India is poised for growth. As more traditional fleet operators shift toward electric buses to take advantage of lower operational costs, the private sector's share of the bus market is expected to rise. JBM Auto, a key player in the electric bus space, notes that private operators currently make up about 15% to 20% of the total bus market in India, but that share is likely to grow as the industry matures and financing options improve.

According to RedBus, one of India’s largest online bus booking platforms, there has been a notable uptick in the adoption of electric buses. For instance, electric buses on routes like Indore-Bhopal have started to outsell their diesel counterparts. This trend is being observed across various platforms like ixigo’s AbhiBus as well, with electric bus adoption increasing by 80% on multiple routes. While many electric bus operators initially offered discounted prices, they are now aligning their fares with conventional bus rates—or in some cases, pricing them at a premium—reflecting the growing demand.

Overcoming Supply Constraints

Despite the delays and challenges, OEMs like JBM Auto and EKA Mobility are optimistic about the future. EKA Mobility has stated that it is ramping up production to meet rising demand, with an order book of 500 vehicles set to be delivered by the end of Q2 2025. JBM Auto also maintains a healthy order book of over 10,000 electric buses, signaling its readiness to scale production.

OEMs acknowledge that the demand for electric buses is high, but they argue that the supply chain is evolving to meet it. JBM Auto emphasized that the delay in government orders—though a major factor in supply issues—stems from the complexities of large-scale procurement, product development, and government approval processes. In the long term, the OEMs are confident that the supply-demand imbalance will be addressed as the production capacity increases.

Conclusion

The growing demand for electric buses in India, especially within the private intercity segment, is a sign of a significant shift toward greener, more sustainable transport options. However, the industry is currently facing a supply crunch as electric bus manufacturers prioritize large government contracts. While private operators are feeling the pinch, there is hope that new entrants and ramped-up production capabilities will ease the pressure in the near future. With the continued push for electric vehicles, India’s private intercity electric bus market is poised for significant growth, even as it works through these initial supply challenges.