CHENNAI: With big ticket state transport orders, electric buses are charging up the highway but EV companies are already looking at a more profitable and less cut-throat niche – employee staff transportation. As companies look at staff transportation and green wheels as part of their own sustainable shift, big electric bus makers like Tata Motors and Ashok Leyland are looking to tap this niche .
In its Q1FY23 earnings call earlier this month, Ashok Leyland chairman Dheeraj Hinduja said the company is focusing on private orders for its electric buses alongside the state transport unit orders. “On the private sector a lot of the buses are used for staff transportation and even Ashok Leyland uses them as does many BPO and IT companies as part of their own green programme,” Hinduja had said.
“We are recently seeing more interest from these customers.” The company’s first delivery of 75 buses for the private sector will happen this month and the “interest is growing” he had said.
The corporate focus for Ashok Leyland is also a way to move away from STU tenders which may not make profits over a longer period because of aggressive pricing by competition. “Even though the larger volumes are coming from STUs, we will be aggressive in those tenders and routes which we feel will be profitable because there is no point taking on contracts which for eight-nine years will run at a loss,” he had explained. Ashok Leyland’s EV arm Switch has 600 e-bus orders from the Indian market and these include private orders as well.
Rohit Srivastava, VP, product line - buses, Tata Motors, said, “Recently, Tata Motors has bagged orders for 1,500 electric buses from Delhi Transport Corporation and 1,180 electric buses from West Bengal Transport Corporation respectively, under the larger tender by Convergence Energy Services Limited. Corporates and private organisations, too, are exploring opportunities with Tata Motors as part of their net-zero goals, and we are engaging with them to offer holistic solutions for sustainable mass mobility.”
Tata Motors, he added, announced its association with Endress+Hauser Flowtec (India) for deployment of electric buses for employee transportation in October 2021. “The association marked a unique contract of electric buses by a corporate in India,” he added.
The search for niches in the e-bus market is understandable. According to a report by Bank of America Securities, “going by already floated government orders, e-buses could touch $2 billion value within two years. This implies around 20%+ EV penetration”. The EV shift in intra city transportation is understandable given predictable routes, ease of charging at depots and running cost of less than Rs 10/ km versus 25-35/ km for CNG/ diesel variants, but B2B niches like employee transportation can be a low hanging fruit say analysts.
Start a Conversation
Post comment