E-buses under PM E-drive to be used now for intercity, tourist travel

The ₹10,900-crore PM E-Drive scheme rolled out in September 2024 to expand city transport may soon be expanded for this purpose, the people said on the condition of anonymity. On Friday, the government allotted 10,900 buses under the scheme, which aims at a total of 14,028 buses.

“The allotment announced on 22 May will first be tendered, followed by demand generation and tendering of more electric buses to remaining cities," one of the two people cited above said. “Then more buses will be deployed for intercity purposes, and for some tourist destinations, for instance, hilly areas."

The plan to permit electric buses for intercity travel and tourism purposes will be implemented after the competitive bidding for all cities is completed, the officials mentioned above said.

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Under the scheme, nine cities with over 40 million people are eligible to receive subsidized e-buses, including New Delhi, Mumbai, Bengaluru, Chennai, Hyderabad, Kolkata, Ahmedabad, Surat and Pune. On 22 May, heavy industries minister H.D. Kumaraswamy said Bengaluru will get 4500 electric buses, Hyderabad 2,000, Delhi 2,800, Ahmedabad 1,000, and Surat 600, in the first phase.

Tendering of the first phase of buses allotted on 22 May will begin in 4-6 weeks, the second official said. Competitive bidding for the supply of the first phase of buses allotted on 22 May will begin in 4-6 weeks, the second official said.

Incentives for each bus sold

Typically, the cost of an electric bus is approximately ₹1 crore. Under the PM E-drive scheme, the Centre is planning to dole out a ₹20-35 lakh incentive for every electric bus sold.

The development assumes importance as nearly 40% of the scheme is set aside for the rollout of 14,028 electric buses till FY26. 

Transport-related emissions in cities and along highways currently account for 10-15% of the pollution in our cities, said Viral Thakker, partner & leader - sustainability & climate, Deloitte South Asia. 

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“There are several advantages of using buses for intercity travel - a large and efficient network of buses can replace cars and provide alternative transportation options to passengers. Electric buses are also a good addition to tourism locations as India looks to develop a number of sustainable tourism destinations," said Thakker.

Subsuming schemes

The PM E-drive scheme, announced in September 2024, subsumed the Electric Mobility Promotion Scheme (EMPS), which ran from April 2024 to September 2024. 

The EMPS and PM E-drive scheme came after a decade of electric mobility incentivization under two iterations of the FAME scheme. FAME stands for Faster Adoption and Manufacturing of Electric (and Hybrid) vehicles. 

The PM E-drive scheme, set to run for two years till the end of FY26, marked a change in the focus of incentivisation of electric mobility, as it focused on incentivising public transportation to become electric, along with a focus on sunrise sectors such as electric trucks and ambulances. It also incentivised electric two-wheelers and three-wheelers. 

The scheme mandates manufacturers to provide electric vehicles to consumers at a lower price. The government then reimburses manufacturers.

Also read |  More than 6 lakh electric 2, 3-wheelers sold under PM E-Drive scheme since April

While electric two- and three-wheelers under the scheme are given direct incentives on purchase, the procedure to incentivize electric buses is little more complex. First, the government gathered demand for electric buses from state governments. After this, it finalized allocation to each city mentioned in the scheme. 

The next step is to conduct competitive bidding for such buses, where state transport utilities would bid for such buses and secure them at affordable rates.