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Tata, Goldstone-BYD Bag the E-Bus Contract

Tata Motors Electric Bus

Tata Motors and a joint venture between Goldstone Infratech and BYD have bagged the electric bus supply contracts of 9 cities, leaving rivals companies empty handed.

India: The joint venture of Goldstone Infratech and China’s largest e-vehicles seller BYD and Tata Motors have bagged electric bus supply contracts for nine cities out of 1a total of ten, leaving competitors like Mahindra & Mahindra, Eicher Motors and JBM Solaris with nothing.

The competitors however, termed some of the winning bids as unfeasible, claiming that the bids were around 30% lower than the market price. But on the other side, this development will drive the E-vehicle market in the country in the coming years.

The joint venture between Goldstone Infratech’s and the Warren Buffett-backed BYD, has obtained the contracts to supply 290 electric buses in Bengaluru, Mumbai and Hyderabad. Tata Motors on the other hand bagged Jaipur, Indore, Lucknow, Kolkata, Jammu and Guwahati and emerged the lowest bidder to supply 190 E-buses. Ashok Leyland bagged the contract for 40 e-buses in Ahmedabad. The 10 cities had called tenders in the last two months in as a part of a program that is partly funded by the Central Department of Heavy industries. Delhi hasn’t yet come out with the tender to procure 700 E-buses using state budget.

The government of India is taking initiatives for E-vehicles with its FAME India scheme or Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India. Under this scheme 60% subsidy is provided to cities for procuring E-vehicles either as a complete purchase or on supply-operate basis.

Tata Motors has placed the lowest bid of Rs. 77 lakhs per bus for the purchase of a 40-bus contract by West Bengal Transport Corp for Kolkata. The bids by the company varied between Rs. 77 lakhs and Rs. 99 lakhs for separate models.

Many industry experts feel that the price quoted by Tata Motors was unfeasible number for many Automotive OEMs and claimed it to be a desperate attempt after they lost to Goldstone-BYD in Karnataka. However, the president of commercial vehicle business at Tata Motors, said in an interview claimed that the company has a clear line of sight of the profitability and will remain committed in its investments in the sector. The company has been extensively investing in the R&D of electric vehicles in the last few years and have taken a longstanding decision. The company firmly believes that sustainable development of the Electric Vehicles pivots on the participation of indigenous players that will invest in the end-to-end value chain.

Goldstone-BYD placed their bids at Rs. 29.28 per km for supply-operate contract for Bengaluru, followed by Rs. 36 per km bid for Hyderabad. Experts feel that it is an aggressive entry pricing strategy

In the December of 2017, the department of heavy industries had sanctioned Rs. 440 crores to 11 states for the procurement of electric buses, electric taxis and e-autos as a pilot project under the FAME scheme. The sanction was for procurement of 390 buses-40 buses per city, except 15 buses for Guwahati and Jammu each. Bengaluru, sought bids for 150 buses, whereas the Telangana State Road Transport Corporation in Hyderabad called tenders for 100 buses.

According to TechSci Research, the constantly increasing air pollution levels in the country has propelled the demand for cleaner vehicles that do not pollute the air. Moreover, the Government of India is extending its support for electric vehicles by providing schemes like FAME etc. In addition, the rising number of research and development activities carried out for electrification of fuel powered buses is anticipated to compliment the country’s electric bus market in the coming years.

According to the recently published report by TechSci Research, India Electric Bus Market, By Vehicle Type (<30 Seater and >30 Seater), By Drivetrain Technology (Battery Electric Bus and Plug-in Hybrid Bus), Competition Forecast & Opportunities, FY2017-FY2023”, India electric bus market is projected to grow at a CAGR of around 124% to surpass $ 667 million by FY2023. With growing need for controlling GHG (Greenhouse gases) emissions emitted by vehicles, the government is encouraging the use of electric powered vehicles across various states, which is boosting the demand for electric buses in India. The electric bus market across India is expected to register a robust growth over the coming years owing to consistently growing affordability of electric buses due to high subsidies provided by the government coupled with various leading commercial vehicle manufacturers foraying into the country’s electric bus market. 

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