Convergence Energy Services Limited (CESL), a wholly owned subsidiary of Energy Efficiency Services Limited (EESL), said that the prices discovered for the largest e-bus tender (6,465 electric buses) under Phase I of the National Electric Bus Program were 29% lower than the diesel vehicles.

The lowest price discovered for operating a 12-meter bus (intra-city) stood at ₹54.3($0.66)/km and was ₹ 39.8 ($0.48)/km for a 12-meter bus (intercity). Prices for a 9-meter bus came in at ₹54.46 ($0.66)/km and was ₹61.92 ($0.75)/km for a 7-meter bus.

The prices do not include subsidies.

CESL was mandated by NITI Aayog to implement a national program of 50,000 e-buses.

The first tender under the National Electric Bus Program constitutes the demand from six states and union territories UTs — Delhi, Telangana, Haryana, Surat (Gujarat), Kerala, and Arunachal Pradesh. The value of the tender was over ₹308 billion ($3.7 billion).

E-buses will be deployed both within city limits and on intercity routes, with the latter being able to travel about 325 kilometers on a single charge.

The buses are expected to operate around 5,718 million kilometers over twelve years, saving 1,842 million liters of fossil fuel and approximately cut 4.62 million tons of CO2 emissions.

CESL said that the prices set a benchmark for public transport and may encourage even the smaller cities to adopt electric vehicles. It added that the price discovery represents electric mobility as a “service” that makes it affordable for state transport undertakings to adopt electric buses.

Mahua Acharya, MD & CEO, CESL, said the tender is a part of the central government’s target to deploy 50,000 e-buses on the roads in the next few years, whilst strengthening, modernizing, and greening public transport in India.

Private operators under the Gross Cost Contract model can bring their buses and operate them for 10 to 12 years against pre-determined conditions in the tender. The state transport undertakings on their part will pay a fee for the bus service.

The contract will benefit under the “Grand Challenge” process and will be eligible to gain from a payment security fund which is under consideration by the Centre.

In a recent development, electric vehicle sales in India reached a record one million units in 2022, a jump of over 300% against the 322,877 units sold in 2021.