Powering Urban Transit with Electric Buses!

Imagine hopping on a bus that doesn’t rumble with a noisy engine, doesn’t emit clouds of exhaust, and doesn’t rely on fossil fuels. Instead, it glides through the streets silently, powered by clean and sustainable electricity. Yes, we’re diving headfirst into the remarkable realm of electric buses – the next big revolution in urban transportation!

Electric buses have become more than just a novelty in recent years – they have become a necessity. As we face the challenges of climate change and air pollution, it is crucial to reimagine our transportation systems and prioritize sustainable alternatives.

Why Electrify City Buses?

  • As the upfront cost of an EV is more than an ICE vehicle, fleet operators with regular and high utilization stand to benefit from lower operating & maintenance costs resulting from economies of scale. City buses, with fixed routes that cover large areas, eminently fit the bill.
  • Buses ply in urban environments where noise and air pollution are major issues. Electric buses solve for both as they generate much less noise and have zero tailpipe emissions.
  • India, in comparison to nations like Brazil, Mexico, and China, requires 300,000 new buses to accommodate its quickly expanding population. This offers a chance to switch from diesel-powered buses to cleaner electric vehicles.

Source: WRI Report on Electric Buses

Only 4,909 of the 12,15,397 total buses in India are electric buses, making about 0.4% of the total.

The two most common bus lengths in India are the 9 m (Midi) bus and the 12 m (Standard) bus. Due to their lower CAPEX costs and narrower streets in cities, 9m buses were favored by most cities.

Source: Vahan SewaUNESCAP  

Anatomy of an Electric Bus

Source: Research gate 

Battery 

  • The battery in the eBus may be placed either on the floorboard or on the roof of the chassis 
  • Lithium-ion batteries are crucial for electric vehicles, with energy consumption primarily influenced by vehicle weight. In the e-bus segment, competition for the highest energy density is fierce.
  • Should have high energy density (to provide a long driving range) & high power density (to increase the acceleration)
  • Currently, lithium iron phosphate (LFP), lithium titanium oxide (LTO) and lithium nickel manganese cobalt oxide (NMC) dominate the Electric bus batteries 
bmz battery

Comparison of a 12-metre e-bus range after 10 years of use, when NMC or LTO batteries are installed. (2021 research)

Clearly from the above, NMC wins the race as it offers both high energy density and ability to fast charge, making it suitable for both opportunity and depot charging (see below). 

LTO offers high charging power but low energy density, and is only suitable for opportunity charging. LFP is more feasible in slow-charging situations.

Source: BMZ Poland  

Charging Methods for Electric Buses in India

Depot Charging is typically slow-charging done overnight when the buses are not plying and does not require additional charging infrastructure en-route. 

Opportunity Charging involves fast-charging during short stops en-route and enables smaller battery packs in buses, but requires conveniently located charging stations.

  • Plug-in charging is the primary method for charging e-buses globally, with AC or DC outputs. 
  • Pantograph charging uses an automated system for DC charging at high power levels. The e-bus must be designed with specific battery chemistries for high resilience. 

Other charging techniques, such as wireless and battery swapping, have been applied, but their adoption remains pilot-level and empirical research on trade-offs is not encouraging. 

Source: WRI India

What are the economics (TCO) of an electric bus in India

  • The focus on electrification of the public transport bus fleets is essential for future-proofing long-term capital investment decisions. 
  • However, for a typical daily utilization of 200km, electric buses currently have a higher TCO per km than diesel (low-cost models) and CNG-fueled buses. 
  • The TCO per km for electric buses is INR 60.47, as compared to INR 69.28 for high-end diesel buses and INR 44.30 for low-cost diesel buses. 
  • For electrified public transport fleets to be economically competitive for transit agencies, electric buses need higher utilization or financial incentives to lower capital costs.

Source: WRI India

Key Electric Bus OEMs in India

Source: Vehicle info (Feb 23)

Deals & Developments in the eBus space

  • July 2023: JBM Auto and its subsidiaries have won orders for approximately 5,000 electric buses for supplying to various STUs & leading corporates

Do write in to us with topics in Climate-tech, Mobility, and New Energy that you’d like us to cover in future editions.

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Mukund Ranganathan

Partner

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Mukund Ranganathan

Partner

Mukund is a seasoned investment banker with 27 years of experience in advising companies on M&A and capital raising transactions. He has served most recently as Joint Managing Director at Motilal Oswal Investment Banking, where he worked from June 2014 to January 2021. During his career, he has facilitated over 70 strategic financial transactions including Motherson Sumi’s acquisition of PKC Group (Finland), sale of Aurangabad Electricals to Mahindra CIE, Siemens’ sale of Bangalore Airport, sale of Spicejet, Aegis’ acquisition of PeopleSupport (USA), sale of Air Deccan among others. Mukund has extensive experience in raising private equity funding as well as in the capital markets including IPOs, follow-on offerings, GDRs and ADRs for L&T Finance, Indostar, Dixon Technologies, Bharat Financial Inclusion, Tata Consultancy Services (TCS), Wipro, GAIL, etc.

Mukund has earlier worked for 9 years at Edelweiss Financial Services and started his career in 1996 with a 9-year stint at Morgan Stanley. Mr. Ranganathan holds a B.Tech degree in Electrical Engineering from Indian Institute of Technology Madras (1994) and a PGDM from Indian Institute of Management, Ahmedabad (1996).

Vasudha Madhavan

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Vasudha Madhavan

Founder & CEO

A pioneer in India’s electric mobility and climate-tech investment ecosystem, Vasudha is the Founder & CEO of Ostara Advisors and has led transformational deals, including India’s first M&A in the electric two-wheeler sector. With over 22 years of experience in Corporate & Investment Banking, she has catalyzed global capital flows into clean mobility, making Ostara Advisors a leader in growth-stage fundraising and M&A.

She has previously worked at Citibank, where she was responsible for setting up & expanding Citi’s India’s ‘Private Equity and Hedge Fund’ coverage vertical, ICICI Bank’s Treasury Division & the Product Technology Group and boutique investment banking firms and made her debut in the Top 20 on the All-India M&A League Tables in late-2018. In 2023, Vasudha was felicitated by India Energy Storage Alliance (IESA) as one of the Top 40 ‘Women leaders driving Energy sector in India’.

After an illustrious career in the Banking sector where she was known for her business acumen as well as her intrapreneur skills, she honed in on Climate-Tech as the vertical she wanted to make a mark in. Vasudha founded Ostara Advisors in 2015 to catalyze global capital flows into the clean mobility and climate-tech ecosystem in India. Taking a thought-leadership approach in these sectors, the firm is today an early mover in institutionalizing fund-raising in these sectors with a focus on growth stage fund-raising and M&A transactions.

Vasudha is also a mentor at Aspire for Her, a unique organisation that enables women to join and stay in the workforce, through campus engagement, mentorships and skilling workshops. Their vision is to impact 1 million+ women and add $5B to India’s GDP through increased participation of women in the workforce by 2025.

Vasudha earned her MBA in Finance from XLRI, Jamshedpur, India and her Bachelor’s degree in Commerce from Mount Carmel College, Bangalore, India. She is also a certified Advanced Scuba Diver and enjoys photography, having held several solo and group exhibitions of her work.

R. 'Shanx' Ravisankar

Industry Expert – Financial Technology and Cloud Solutions

Shanx is a founding member and former CEO of Oracle Financial Services Software, (formerly known as i-flex Solutions, the company was acquired by Oracle in 2006). Shanx retired in 2011 as the Chief Operating Officer, Oracle Financial Services Global Business Unit (FSGBU). As a technology leader, he has also been profiled in leading trade and industry publications. In 2008, Shanx was selected as one of the 50 Outstanding Asian American business leaders. This accolade celebrates Asian business leaders and recognizes their pivotal roles in Corporate America. Shanx is an engineering graduate from the Indian Institute of Technology, Chennai, and has an MBA in Management from the Indian Institute of Management, Ahmedabad, India.
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