As production plants across China struggle with supplies due to the coronavirus outbreak, the market leader of electric buses in India is confident of meeting delivery deadlines.
Olectra Greentech, which has bagged contracts to supply 735 electric buses to nine cities in India, said it was on track to deliver all the buses before December even if the production in China remained impacted for the next two months.
Speaking to Moneycontrol, N Naga Satyam, Executive Director - Olectra Greentech, said, “The impact of coronavirus is not at all there for us as of now. This is certainly one of the major concerns of everyone. If the situation continues for long there will surely be an impact. We don’t have a complete electric mobility components set up in India. Some of the major ones like batteries and motors and other controls are still imported”.
The Secunderabad-based Olectra sources bus chassis from Chinese firm BYD, one of the largest electric bus manufacturers in the world. The body of the bus is erected by the BSE-listed Olectra Greentech. The alliance has bagged the maximum number of electric bus orders based on tenders floated by the government.
Since the outbreak of the virus in China, there has been uncertainty in the Indian auto sector about the production getting impacted. Even Olectra's shares have suffered. From Rs 177 on January 15, the stock is down nearly 50 percent to Rs 90 on March 9, on the BSE
Big contract
“We have won a contract to supply 735 buses. We are going to enter nine new cities and all of whom are going to deploy electric buses for the first time. We have more than 30 percent share of all contracts awarded by the government. We are the market leaders as of now”, added Naga Satyam.
These fully-electric buses of different sizes have to be delivered before December to cities including Surat, Bhopal and Indore. Some of its 9-meter and 12-meter buses costing anywhere between Rs 1.5–Rs 2 crore are already running in Pune and Mumbai. Subsidies on these buses range from Rs 35 lakh to Rs 55 lakh or 40 percent of the cost of the bus.
“We have time till December 2020, a ten month long window to deliver the buses. If the situation continues for another three months then we have something to worry about”, added Naga Satyam.
Last week, Tata Motors - India’s biggest commercial vehicle maker - warned that it had parts supplies lasting till the middle of March only. However, the company did not specify if the production of its electric buses or cars would get impacted by the disruption in China.
Estimates suggest that Tata Motors is the third-largest winner of new electric bus contracts under the Rs 10,000 crore FAME II (Faster Adoption and Manufacturing of Electric and Hybrid Vehicles) scheme announced by the government in 2019.
Mozev, a Gurugram-based electric mobility solutions provider, is also one of the several companies to have won electric bus orders including a 50 bus order from the Maharashtra State Road Transport Corporation (MSRTC). Sources indicate that there has been no impact of Covid-19 outbreak on operations so far.
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