CESL Mulls $10 Billion Tender For 50,000 EV Buses To Decarbonise Public Transport

State-controlled Convergence Energy Services Ltd. (CESL) is looking at floating a $10-billion tender to buy close to 50,000 electric buses to help make public transport carbon emission-free.

CESL Managing Director Mahua Acharya has been quoted by a news report as saying, “Such tenders are beginning to look like infrastructure projects and local production of electric buses is expected to grow in tandem with demand. This country is moving very very rapidly on its electric vehicles ambition. So financing remains a challenge in as much as it presents an opportunity.”

Formed in 2020 to manage the solar and electric vehicle leasing business of its parent Energy Efficiency Services Ltd., CESL is a venture between four state-run energy companies assigned to a major role of cutting down India’s overall projected carbon emissions by 1 billion tones by 2030. The target of net zero emissions by 2070 has made it more imperative for state owned agencies to pull up their socks and go into the overdrive mode.

Acharya stressed the responsibility of India, as world’s third-biggest emitter, to expand charging stations, enhance grid capacities, pioneer new ideas and redesign depots to encourage the adoption of electric vehicles. In the same breath, she also brought to notice the ongoing shortages with battery supplies as a concern, while pointing out that EV manufacturers have not halted production. It is far more problematic for the EV industry to make safety features foolproof and optimise battery size in accordance with the subsidy scheme offered by FAME.

India could electrify all two-wheelers plying on the roads and complete the electrification of public buses in five to seven years, Acharya said. It may be added here that CESL awarded a contract for 5,450 electric buses on behalf of five state governments earlier this year. CESL is still on the lookout for investors for its distributed solar businesses that it is funding internally presently, she added.

The EV push in India throws open the doors of multiple business opportunities across three chief segments – mobility, infrastructure and energy. These entail opportunities in EV franchising, EV OEM market, battery infrastructure, solar vehicle charging and battery swapping technology among others. As per NITI Aayog, the complete transition to EVs requires a total investment of US$ 267 billion (Rs.19.7 lakh crore) in EVs, battery infrastructure and charging infrastructure. According to the Ministry of Skill Development and Entrepreneurship (MSDE), the EV industry could add 10 million direct jobs by 2030 which would create 50 million indirect jobs in the sector.