Electric bus (e-bus) manufacturers now have until November 14, up from the earlier deadline of November 6, to submit their bids for the supply of e-buses for Bengaluru, Hyderabad, Surat, Ahmedabad and New Delhi, according to a public document released on November 4 and confirmed by officials.
The ₹The PM 10,900 crore PM E-Drive scheme aims to deploy 14,028 e-buses in nine cities, with the government offering 40% upfront to state-owned utilities to purchase buses from e-bus manufacturers, which will be paid on a per kilometer basis. Bidding for this massive tender was due to close in August and has been moved to October 14th. It was then moved to November 6.
Mint reported on 22 October that the tender was delayed for the second time due to bus manufacturers finding the contract too expensive and stringent, as well as the lack of e-bus infrastructure in the states. Tata Motors, JBM Auto, PMI Electro Mobility Solutions, EKA Mobility, Olectra Greentech and Switch Mobility were interested in supplying the buses, Mint reported.
Companies have to pay an earnest money deposit of over ₹312 million to participate in the tender for all five cities, according to publicly available tender documents. However, they can also choose to pay for select “lots” of buses to be delivered in specific cities, reducing the earnest money deposit.
In response to a query from Mint, CESL said, “The last date for submission of bids has been extended to November 14 following requests from several potential bidders who are requesting additional time to finalize their bids. The extension is intended to encourage wider participation and ensure a more competitive bidding process. The decision also takes into account the holiday(s) during the current period.”
CESL said it was “one of the largest tenders” of its kind, involving extensive technical, financial and operational preparations. “Potential bidders are required to secure financing, form consortia or tie-ups and meet other necessary compliances,” it said. “In light of this, it is important to allow adequate time to ensure comprehensive participation and fair competition. The extension of the tender deadline has therefore been made in the overall interest of the process and to encourage wider industry involvement.”
No request received
The agency said it has not received any extension request from state governments.
“The government has received several declarations from bidders for an extension due to the recent festive period,” said the first official quoted earlier on condition of anonymity because information about the tender process is confidential.
CESL had written to stakeholders on October 30 that state transport authorities would have to provide the necessary upstream charging infrastructure to deploy these buses at depots. This includes grid networks and transformers that bring electricity to the charging point from energy distribution companies.
The states have now written to the agency asking to change the terms of the contract to install charging infrastructure at bus depots because they face challenges in installing the charging infrastructure, according to another official aware of the development, who spoke on condition of anonymity.
The Ministry of Heavy Industries, which runs the PM E-Drive scheme, and e-bus manufacturers Tata Motors, JBM Auto, PMI Electro Mobility Solutions, EKA Mobility, Olectra Greentech and Switch Mobility did not immediately respond to queries sent on November 5.
“Public transport is the backbone of any sustainable city – and in today’s world it has to be zero-emission,” said Amit Bhatt, India director of the International Clean Transport Council, on the need for more electric buses to reduce air pollution. “Electrification of public transport requires thoughtful and comprehensive planning. It is essential to have a clear plan for acquiring land for bus stations and developing supporting infrastructure to accommodate electric buses.”
Asset-heavy model for bus manufacturers
The PM E-Drive scheme for e-buses aims to reduce the cost of acquiring and operating zero-emission public transport to reduce vehicle emissions and reduce the country’s dependence on fuel imports.
For electric scooters, bicycles, rickshaws and other three-wheeled vehicles, the government will pay incentives directly to manufacturers for selling the vehicles at a discount. However, for e-buses, instead of a full advance for the purchase of buses, the government will pay the state transport authorities, who will pay the bus manufacturers for each kilometer run. The model is intended to ease the burden on state transportation agencies that have historically failed to pay manufacturers.
The electric bus costs approx ₹1-1.25 million and the central government plans to cover 20-35% of the cost of each bus under the PM E-Drive scheme.
Bus manufacturers are reluctant to enter into these contracts because ownership of the bus remains with them, making it an asset-heavy model.
A Tata Motors Ltd spokesperson had earlier told Mint that the company plans to re-enter select tenders through a consortium model, though the activation mechanisms are awaited to be fully clarified. Mint had earlier on October 15, citing people familiar with the matter, reported that Tata Motors had skipped the tenders where the company has to own the e-bus.
Mint also said on October 22, citing people with knowledge of the matter, that the terms of the tender were too strict and included restrictions on investor exits to bus manufacturers and operators, preventing changes in ownership.
Tata Motors, Olectra, JBM, PMI and Switch Mobility had around 88% share of the electric bus market in FY24, according to a CareEdge Ratings report. “These companies had an order book of approximately 20,000 electric buses as of September 30, 2024, to be delivered over the next 1-2 years.”
A March 2025 report estimates that e-bus sales are expected to exceed 17,000 units by FY27 thanks to the incentives.
Additionally, large order books cause delivery delays. In May this year, the Maharashtra government abolished a ₹10,000 crore contract with Olectra Greentech for 5,150 buses after the company failed to deliver the buses on time. The contract was renewed after the state government and the company agreed on a staggered supply plan.
