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Business News/ Industry / Energy/  CESL calls bids for supplying 100,000 E3Vs

CESL calls bids for supplying 100,000 E3Vs

The Energy Efficiency Services Ltd's subsidiary aims to have 200,000 two-wheeled electric vehicles and 300,000 three-wheeled EVs across India

CESL will lease the vehicles to entities that wish to avail of such leasing services.Premium
CESL will lease the vehicles to entities that wish to avail of such leasing services.

In the largest such global tender state-run Convergence Energy Services Limited (CESL) on Friday called bids for procurement of 100,000 electric three wheelers with an estimated cost of Rs3000 crore.

The Energy Efficiency Services Ltd's (EESL) subsidiary aims to have 200,000 two-wheeled electric vehicles (EVs) and 300,000 three-wheeled EVs across India, with the government allotting the demand aggregation of electric three-wheeler and electric bus component to CESL’s parent firm EESL under the 10,000 crore Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (Fame) scheme.

“A request for proposals has been issued inviting original equipment manufacturers (OEMs) to provide quotations for E3W under different use-cases – including, garbage disposal, freight loaders, food and vaccine transport and passenger autos," CESL said in a statement.

In addition to supplying electric two-wheelers to states such as Andhra Pradesh, Kerala and Goa, CESL has also been aggregating demand for leasing out and operating three-wheeled EVs for the garbage collection fleet of municipalities across the country, including for Pune Municipal Corporation.

“With this level of demand witnessed from cities, fleet operators, and financing entities, it is clear that the market is ready for electric vehicles. We expect to develop a significant leasing business and are already in touch with third party investors," CESL managing director and chief executive officer Mahua Acharya told Mint.

The plan has gained traction with OEMs with Kinetic Green Energy and Power Solutions and Mahindra Electric Mobility interested in supplying electric three-wheelers as part of CESL's scheme Mint reported earlier.

“CESL will lease the vehicles to entities that wish to avail of such leasing services. CESL will also make these E3Ws available through its digital platform for resale to any entity interested in outright purchase," the statement added.

Fame is designed to support the electrification of public and shared transport and help create charging infrastructure. The scheme is an important part of the government’s strategy to reduce vehicular emissions and dependence on fossil fuel.

“This tender also includes demand from cities that wish to change their garbage collection fleet from fossil fuel to electric, or add new fleet that is clean and cheaper to operate. A significant portion of this tender also comprises demand for vehicles that will be used to provide employment and the delivery of vaccines," the statement said.

CESL is also in discussions with Swachh Andhra for an additional 15,000 garbage tippers for Andhra Pradesh. The firm plans to halve the cost of ownership of these vehicles through incentives offered under Fame scheme, state government subsidies, support from EV makers and carbon credits. . The government has also extended the Fame scheme by two years till 31 March 2024 and has increased the incentive for electric two-wheelers to 15,000 per KWh under it.

According to CESL, interested bidders include financing entities, third party logistics players, fleet operators with the playbook involving catering to the requirements of e-commerce players, municipalities and private auto owners.

“Based on the demand received CESL expects to lease about 50% of these vehicles," the firm said and added that it is in discussions with third party investors, including private capital.

“The scope of work for the OEM(s) includes designing, engineering, manufacturing, testing, inspection, supply, transportation, complete system warranty & transit insurance, delivery to the end-consumer and providing after sales support," the statement said.

CESL is also in talks with non-banking financial companies (NBFCs) to reduce interest rates on EV loans by at-least 5 percentage points to make them affordable as reported by Mint earlier.

“Convergence will employ business models that utilize a blend of concessional and commercial capital, carbon finance and grants as appropriate to enable commercialization of these solutions at scale," the statement said.

In a push for India’s green mobility plans, CESL is also working on a ‘grand challenge’ among nine major Indian metros for allocating electric buses.

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Utpal Bhaskar
"Utpal Bhaskar leads Mint's policy and economy coverage. He is part of Mint’s launch team, which he joined as a staff writer in 2006. Widely cited by authors and think-tanks, he has reported extensively on the intersection of India’s policy, polity and corporate space.
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Updated: 06 Aug 2021, 11:05 PM IST
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