Soaring diesel prices push bus operators to consider EVs

by Mayank Dhingra & Nilesh Wadhwa 21 Oct 2021


Fuel prices have been on a boil in India over the last few weeks, with diesel surpassing the Rs 100-per-litre mark in Mumbai on October 9, essentially registering a substantial increase of Rs 36 per litre, between April 1, 2020 and October 16, 2021.

While private motorists have been bearing the brunt of the escalating prices almost every day, inter-city bus operators too have been witnessing grave impact on operating costs.

“Cost of operation has gone up by 10-12 percent compared to a year ago,” says Amit Gupta, co-founder of gogoBus, a Gurgaon-based start-up providing technology solutions for inter-city bus ticket reservations.

With a fleet of 125 buses operated by 40 operators in the North, East and Central part of India, gogoBus is already has bus operators keen to incorporate a few EVs in their fleets in order to offset high fuel (diesel) costs.

“If long-range EV buses were available today, operators are willing to put in money and buy those vehicles,” he added, while highlighting the only concerning factor with respect to EVs - the range on a single charge.

“Almost 40 percent of the inter-city bus travel in India happens in the range of 250-300km and with a range of 250km of a single charge of an electric bus, the effective utilisation of the vehicle would also go up significantly by doing up to three trips a day including two fast charges,” Gupta explained.

The start-up is eyeing sustainability and aims to incorporate electric buses, which will be owned by its operator partners, on its platform in the next 6-12 months, and is in talks with a couple of OEMs that are working on long-range electric buses by deploying sodium-ion batteries.

While cost of electric buses have come down by up to 25 percent compared to five years ago, government subsidies such as the FAME II scheme are also playing their part in bringing price parity with diesel counterparts.

“The current unit economics are such that operators will also be able to offer a 5 percent discount on tickets, compared to conventionally-powered buses,” Gupta said.

“The rising prices of fuel and lowering prices of battery are making operators think to go electric,” he signed off on an optimistic note, with an aim to scale up the gogoBus business that started in January 2020 from existing 120 buses to reach 1000 buses over the next eight months, and to around 5,000 buses over the next 4-5 years across India.

According to Bal Malkit Singh, Chairman - Core Committee, All India Motor Transport Congress (AIMTC), "High fuel prices are leading to uncontrolled inflation and ravaging the road transport sector."

"Attraction towards EVs is a worldwide phenomenon and with more penetration of EVs, the traction will come. High fuel price is also one of the factors that is making bus operators move towards alternate fuel and technology to make their operations sustainable," Singh added.