Retrofitted 9-meter buses are 32.1% more cost-effective than a new EV bus: EGROW and Primus Partners report
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- An ICE bus costs more than Rs29/- per km, while an electric one costs Rs28/- per km. In contrast, a 9-metre retrofitted bus costs Rs19/- per km, a 12-metre retrofitted bus with two batteries costs nearly Rs22/- per km and a 12-metre retrofitted bus with three batteries costs marginally more than Rs23/- per km. Thus Retrofitted 9-meter buses are 32.1% more cost-effective than a new EV bus. The 9-metre retrofitted bus is the most economical option.
- Retrofitted buses promise major output on RoI (return on investment). For a 9-metre retrofitted bus with an extended life of 10 years, the cost per km declines to less than Rs15/-. Using the same calculation, the cost per km for a 12-metre bus with two batteries is less than Rs17/- and less than Rs19/- for a 12-metre bus with three batteries.
- More than 75% of domestic electricity currently comes from coal-based thermal power. To execute an effective decarbonisation strategy for India’s transport sector, the electricity used in the retrofitted buses must come from renewable sources rather than fossil fuels.
- Retrofitting ICE buses to EVs will create new job opportunities. The state transport undertakings (STUs) employed 640,690 people in 2020-21, with an average of 5.63 employees per bus, including 4.46 traffic staff such as drivers, conductors, and supervisors. Additionally, 84,818 workers involved in repair and maintenance can retain their jobs through reskilling and upskilling. Retrofitting is projected to add 6000-7000 direct jobs and 36,000-42,000 new indirect jobs over the next few years.
- The findings recommend specific policies to increase retrofitted bus numbers in India. Implementing a scaled pilot project aimed at converting existing ICE buses into EVs across different regions is an important step.
- Revisiting and modifying the existing vehicle scrapping policy to substantially reduce re-registration fees for retrofitted EV buses will encourage the reuse of older diesel vehicles.
- The government should subsidise retrofitting of old diesel buses in coordination with state governments, offering State Road Transport Undertakings subsidies to increase the ROI for retrofitting projects.
- The government should also incorporate retrofitting incentives into the FAME (Faster Adoption and Manufacturing of Electric Vehicles) policy to boost EV adoption.
On the monetary side, rebating GST norms for retrofitting vehicles and used components is critical to spreading awareness. State-level Retrofit EV Policies should be introduced to support retrofitting, including interest rate subsidies and charging infrastructure development.
EGROW and Primus Partners extensive report further highlights the necessity of retrofitting diesel buses to electric, amid the changing environmental conditions. Retrofitting of buses offers a cost-effective, environment-friendly transition solution. Implementing the recommended policies and initiatives can accelerate the adoption of EVs in the public transport space. This approach supports India’s broader goals of reducing emissions and enhancing energy security while nurturing innovations in green technologies for a circular economy.
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