Startups eye intercity travel, hitching ride on permit exemption for e-buses

Interior of an inter-city electric bus

An increasing number of passenger transporters are seeking to ply on intercity bus routes by taking advantage of permit exemptions for electric buses in what could be a game changer for long-distance travel.

Intercity bus permits used to be hitherto the preserve of some bus operators in a transport segment allegedly riddled with corruption.

With the Centre aggressively pushing the expansion of highways, intercity bus journey times are likely to reduce, attracting more customers and making the business viable for E-bus operators.

On April 23, ixigo-owned Fresh Bus launched its first intercity EV bus service, a 12-meter premium coach with a capacity of 45 seats, on the Bengaluru-Tirupati route.

Trial runs on the road going smoothly for FreshBus, our modern, electric inter-city bus service. This beast was able to do 400+ Km on a single charge. pic.twitter.com/tIYRmSOqsD

— Aloke Bajpai (@alokebajpai) April 17, 2023

Sudhakar Reddy Chirra, founder of the Bengaluru-based EV bus startup, told Moneycontrol: “We are rolling out 24 buses on two routes, Bengaluru-Tirupati and Hyderabad-Vijayawada, in the first phase. We have identified the top 100 routes where we will start services in the next phase, which includes Bengaluru-Chennai, Mumbai- Ahmedabad, Goa -Pune and Delhi -Jaipur. The fares will be the same or slightly less than diesel buses.”

Bengaluru —> Tirupati

EV
Comfortable
Noiseless
Low fares starting at Rs 399/-

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Best way to commute!! #Freshbus@ixigo@alokebajpai@SudhakarAbhiBushttps://t.co/tInSEPSJMtpic.twitter.com/4L1KZOZsVk

— Rajesh Sawhney

Fresh Bus raised Rs 26 crore in seed funding from ixigo (Le Travenues Technology Limited) earlier this year. “We expect to scale to 1,000 E-buses pan-India by 2026 and offer a green alternative for mass road transportation,” said Chirra.

Chirra said his startup would offer a “flight-like experience” to passengers.

“With 0-100 percent charging within two hours, our buses can travel up to 400 km at a maximum speed of 90 kmph...,” he said, adding that the fleet would have features including “noise-free air-conditioned cabins, comfortable seating, uniformed and friendly crew, Internet-Of-Things (IOT)-enabled real-time air-quality and temperature monitoring, CCTVs, personal charging docks, Wi-Fi, real-time tracking and alcohol checks.

Mumbai-based firm Greencell Express Pvt Ltd, which operates NueGo, has also announced plans to roll out 750 premium airconditioned E-buses across intercity routes in 75 cities across the country. At present, NueGo operates on routes like Bengaluru-Tirupati, Indore-Bhopal, Delhi - Chandigarh, Delhi-Jaipur, Hyderabad-Vijayawada, and Delhi-Dehradun.

New bus in town @Nuego_IN
An electric bus emits no CO2 locally and virtually no noise!!
Enjoyed my journey with #NueGo no noise,no pollution, had a smooth drive thank you @Nuego_IN#ElectricBus #Vijayawada to #Hyderabad@HiHyderabad @pibvijayawada pic.twitter.com/wjgMnPTDzx

— Vineeth (@vineethchimata) February 3, 2023

On its website, NueGo claimed to be India's first intercity electric premium AC coach service.

“NueGo is dedicated to building a platform to provide Electric Mobility-as-a-Service (eMaaS). We’re bringing a better booking experience, luxurious lounges, guest assist programmes, a superior in-cabin experience, international standard of safety and service; as well as technology-driven value-added services like geo-location sharing through our state-of-the-art app”, it says.

No permits required for e-buses

To encourage more fleet owners to switch to environment-friendly E-vehicles and also to eliminate corruption in issuing permits, the central ministry of road transport and highways said in 2018 that no permits would be required for vehicles including auto-rickshaws, buses and taxis running on alternative fuels, including Compressed Natural Gas and ethanol as well Electric Vehicles.

“No permit is required for electric buses within the city or on inter-city routes. However, these battery-run vehicles will have to comply with other rules such as a fitness certificate and passenger insurance cover," L Hemanth Kumar, additional commissioner for transport and secretary at the Karnataka State Transport Authority, told Moneycontrol.

“All-India permit costs are exempted by the Union government for EV buses. Permits are issued automatically to all commercial electric vehicles at zero fees without approvals” Chirra said.

KSRTC plans to induct additional 300 E-buses

Buoyed by the response to E-buses, the Karnataka State Road Transport Corporation (KSRTC) is planning to induct 300 more E-buses

KSRTC managing director V Anbukumar told Moneycontrol: "We have already inducted 34 of 50 E-buses sanctioned under Phase 2 of the FAME scheme. We are now operating E-buses on inter-city routes from Bengaluru to Mysuru, Davanagere, Virajpet and Madikeri. Our E-buses received an overwhelming response and are making operational profit.". FAME is short for Faster Adoption and Manufacturing of Hybrid and Electric Vehicles.

KSRTC e-bus

Anbukumar said KSRTC would lease the 300 E-buses. “Of these 200 will be non-AC and remaining 100 AC. We will use these buses to operate in 100-150 Km radius from Bengaluru to nearby districts where the demand is high. We are opting for the lease model since purchasing buses is capital intensive”.

On more bus operators entering into the intercity bus segment, he said: “People trust in our services because of various reasons; 55 percent of our revenue goes for salary so we have a trained and well-behaved crew. For any bus operator, maintenance of buses beyond three years is a challenge. We are also replacing our old fleet with new buses. More operators entering into the inter-bus electric segment is a challenge but we will continue to improve our performance and efficiency”

KSRTC launched its first inter-city AC electric bus service (EV Power Plus) on the Bengaluru-Mysuru route on January 16. The buses are being operated by Hyderabad-based Olectra under a Gross Cost Contract (lease model) wherein KSRTC pays Rs 55 per km as operational cost, including electricity charges. KSRTC deploys its conductors in these buses.

Other road transport corporations in states like Maharashtra, Uttar Pradesh and Andhra Pradesh also operate intercity electric buses.

Big opportunity for new players, cost a deterrent

Experts say exemption from permits in the intercity passenger transport segment is a big opportunity for new players. Pawan Mulukutla, Director, Electric Mobility & Hydrogen at WRI India, said: “This is a big opportunity for mobility firms focusing on E-buses. Bus fares may come down once the supply of E-buses is stabilised. EVs have more advantages since the maintenance cost is also less. If they operate 250km/day for 10 years, the total cost of ownership will also come down.”. WRI campaign for environmentally sound development.

While E-buses on intercity bus routes indeed have the potential to change the way people travel long distances, the capital cost may be a deterrent. L Radhakrishna Holla of the Karnataka State Travel Operators Association, said: "Though permits are exempted, capital cost of a new electric bus ranges between Rs 1-2 crore. More operators will come forward if the banks offer (loans with) less interest rates. Operators could also introduce electric buses for employee transportation and also for package tours."