[TusharK]

Tata Motors has signed an agreement with the Assam State Transport Corporation to run electric buses with a seating capacity of 26-34. Test runs of the 9-meter electric bus have begun in Guwahati, Assam and are expected to last for 7 days.



Similar trials have already been completed in Shimla and Chandigarh. During the trials in Chandigarh, the Ultra ELECTRIC 9-meter e-bus covered 143 km with 70% of the battery charge, while in Shimla it managed to clock 160 km on a single charge. The company claims that it's the sole automaker to get ARAI certification for its 9-meter and 12-meter electric buses.

Meanwhile, Himachal Pradesh Road Transport Corporation (HRTC) has already started operating its first electric bus on the Kullu-Manali to Rohtang route. It runs a Goldstone-BYD eBuzz K7 25+1 seater electric bus on this route which has a claimed range of 200 km per charge.

Earlier this month, Tata Motors bagged a government contract to supply 10,000 electric vehicles. As part of the deal, the company will deliver Tigor-based EVs to the state-owned Energy Efficiency Services Limited (EESL) in a phased manner.

Source: Economic Times

[V.Narayan]

Very encouraging to see this. These are the vital first baby steps of a nation towards building its electric vehicle industry. The infrastructure for re-charging, disposal of batteries, renewable energy sources and so on will take time and till then provide feeding grounds for the skeptics. Kudos to the Tata's and the Assam State. Every journey of a thousand steps begins with the first one.

[SmartCat]

I'm a bit surprised by the enthusiasm of state owned transport companies.

I guess zero fuel expenses greatly improves their cash flows. I looked at the annual report of a company called VRL Logistics that owns both trucks & buses. Their fuel cost is 60% of the revenues. If they opt for electric buses, their operating margins will skyrocket. However, because of higher cost of electric buses, their finance cost will go up.

For the manufacturer point of view, I'm guessing designing an electric bus is simpler once they get their hands on a powerful motor? They don't have to worry about packaging - lots of room to place batteries!

[giri1.8]

I am happy that electric is making its way into the market, but looking at how China is implementing electric vehicles and infrastructure I feel we are lagging behind! hope our companies develop good quality automobiles before some company starts importing from foreign country(our funds would again find its way to pockets abroad).

Sounds like the perfect time to invest in TATA motors, long term investment of course !

[narayan]

Originally Posted by smartcat

I guess zero fuel expenses greatly improves their cash flows. I looked at the annual report of a company called VRL Logistics that owns both trucks & buses. Their fuel cost is 60% of the revenues. If they opt for electric buses, their operating margins will skyrocket. However, because of higher cost of electric buses, their finance cost will go up.

I wonder what the impact on corporate tax outflow would be - would the depreciation benefit of a higher cost asset offset the drop in operating expenses so that net taxable income stays constant/increase/decrease ?

Improvement in cash flow will result in "easier" financing from banks because many of the current ratios might improve.

Another gain is the operational hassles of managing fueling of their fleet might come down.

[SmartCat]

Originally Posted by narayan

I wonder what the impact on corporate tax outflow would be - would the depreciation benefit of a higher cost asset offset the drop in operating expenses so that net taxable income stays constant/ increase/ decrease ?

Everything depends on how much premium an electric bus costs over a diesel bus.

Warren Buffett (richest man in the world) hates the word 'depreciation benefit'. He says 'tooth fairy' does not pay for capital expenditure (purchase price minus selling price) in acquiring an asset - it has to be borne by the buyer. So I guess electric buses will cost more to an operator in terms of both depreciation and finance costs.

However, according to Credit Suisse report, electric vehicles are likely to have 40% lower maintenance costs over its lifetime - when compared to internal combustion engine vehicles. So that's another plus for a business that runs electric buses.

I don't expect private bus operators to jump in right away though. There are too many unknowns (long term reliability, resale value etc). Known devil is better than an unknown angel

[srishiva]

I though electric vehicles atleast for passenger buses would not be that complicated. The thing thats glaring is the will power and perseverance on the part of private vehicle manufacturers.

Govt corporations can be made to test or adopt them with a bit of lobbying. But we need something that could be showed as working and easier to maintain. The whole western world is looking at us as a huge market that could help their economies and our own companies are not showing any ingenuity.

[mvadg]

There are many forces at work when the government is involved, or rather, government employees are involved - not all of it good.

There is no doubt that Volvo buses are more comfortable, but the government of Karnataka prioritizes overpriced buses over better public transport.

The same kind of reasoning prioritizes battery powered buses over tramways or trolley buses. Do the Tatas have expertise in battery technology? Or for that matter, even our institutions of higher learning?

I would put these on par with the "bullet train" - crumbling railway infrastructure against the overpriced maglev.

But I must admit, I don't understand our government babus at all.

[condor]

Originally Posted by smartcat

I looked at the annual report of a company called VRL Logistics that owns both trucks & buses. Their fuel cost is 60% of the revenues. If they opt for electric buses, their operating margins will skyrocket.

Even before looking at the financing aspect, we need to look a the usage. VRL operates long distance routes. None below 350 km, and even these are often overnight. The range of these electric buses are 160-175 in city / hilly regions, and this may translate to about 275-300 on highways ? Still not enough for non city transport. However, state govt agencies may try them for short hauls like BLR-Mysore & such. Another key point will be charging facility, and impact of charging time on trips (within city / even outside)

[SmartCat]

According to Goldman Sachs report on EVs -

1) Electric Buses are likely to be 3 times more expensive than diesel buses, but Total Cost of Ownership of electric buses are likely to be 30% cheaper than diesel buses over its lifetime.

2) In India, electric buses are likely to have the highest acceptance followed by -

Three Wheelers
Two Wheelers
App based Taxis & finally
Private Cars

3) By 2026, almost 30% of the power generated in India will be power plants that do not pollute the air.

[ferrarirules]

Tata bags contracts for supplying electric busses in six cities namely - Lucknow, Kolkata, Jaipur, Indore, Jammu and Guwahati. But is pipped by Goldstone-BYD for major cities. See article below