A commercial analysis for sustainable public transit procurement approach in India’s buses electrification drive

Road transportation in India is the primary mode of transportation in terms of traffic share and economic contribution, but it is also the third-largest source of CO2 emissions. India is working towards net-zero emissions by 2070 and has been focusing on commercial electric vehicles (EVs) to achieve this goal. The increasing popularity of EVs has significantly impacted the 2-wheeled, 3-wheeled, and 4-wheeled vehicle segments. However, commercial vehicles such as buses and trucks have yet to reach targeted levels and are still in the early stages of the market. This work presents a cost-benefit study to analyze the commercial aspects of medium-to-heavy-duty (MHD) EVs based on market strategy, sales, and provision. A simulation-based analysis is performed using real and assumed data sets to estimate the commercial implications of a large-scale transportation sector for India. A Total Cost of Ownership (TCO) comparative study of 9/12 meter (m) e-bus segments is conducted against diesel and compressed natural gas (CNG) counterparts, to estimate the operational schedule and breakeven point (BEP) for fleet operation. The study also covers the pay-for-usage/lease model as a potential driver of e-bus market sales. Factors such as daily distance travelled, upfront cost, occupancy, and fares per km significantly affect TCO and BEP, and the study presents decision-makers with a range of outcomes through sensitivity analysis.

I. Introduction

Transportation is a major contributor to global carbon emissions, and road transport alone accounts for 80% of emissions in the sector. Transport has the highest reliance on fossil fuels of any sector and accounted for 37% of CO2 emissions in 2021 [1]. In the same year, as pandemic restrictions relaxed and passenger and goods movements began to pick up following the plunge in 2020, global CO2 emissions from the transport sector rebounded, rising by 8% to over 7 Giga tonnes (Gt) of CO2 (Figure 1) [1]. The prominent case of extreme air pollution is the national capital of India, New Delhi, and its adjoining areas, are struggling with an air-quality index (PM 2.5 AQI) usually within 350-400 and reaching a maximum of 532, in the range of severe+.