All aboard: A peek at the new compact driving India’s intercity e-bus operations

Compelling business case

To be sure, diesel buses still rule the roads, be it for intra-city or intercity travel, and make up the vast majority of India’s 2 million buses. To begin with they are far cheaper: a diesel bus for intercity operations costs around ₹65–70 lakh, while a comparable electric bus will cost ₹1.6–1.8 crore.

While financing is required for both powertrains, an operator can secure a diesel bus with a contribution of ₹3 lakh, while the required contribution rises to at least ₹15 lakh for an electric bus. “So, purchasing 100 diesel buses is a ₹3 crore bill for me, while 100 electric buses would cost at least ₹15 crore up front,” Patwardhan told Mint.

Diesel buses only need to pick up passengers and move. Fuel can be topped up at any retail outlet, something electric bus operators have to plan for in advance. “There is far more planning involved for e-buses—battery size, charging requirements, route planning, etc.—whereas there is greater ease of doing business with diesel buses because everything is standardized,” Patwardhan adds.

Even with all these disadvantages, e-buses are now seeing some traction, because despite their high cost, the operational economics are too compelling to ignore. Operators such as Patwardhan say there is a saving of nearly ₹5 on every kilometre for an e-bus, compared to a diesel bus. On a daily run of 600 km, that amounts to a saving of ₹3,000, or close to ₹1 lakh a month. And that is why operators are willing to pay nearly three times more to buy an e-bus.

A big factor in the growing traction for intercity e-buses today is a kind of convergence among different stakeholders in the ecosystem. E-bus makers, operators, financiers or lessors, and charging solution providers are forming contractual relationships aimed at achieving a common goal: unit economics.

One such relationship is in the supply of electricity. “Commercial mobility is enabled with certain unit economics, which makes the cost of power crucial,” says Kartikey Hariyani, chief executive officer (CEO) of ChargeZone, a Vadodara-based charge point operator (CPO). E-bus companies and CPOs that Mint spoke with said bus operators can receive electricity at around ₹14–15 per unit if they strike a deal with a charge point operator, against a retail price of ₹24–25 per unit.

“The advantage of tying up with a charge point operator is that the e-bus operator does not have to burn cash up front to invest in land and charging infrastructure,” says Shyamasis Das, who heads the electric mobility research vertical at the Centre for Social and Economic Progress (CSEP), a Delhi-based think tank.

There is a kind of mutual dependence in the relationship because both sides have to sink huge amounts of money into their respective businesses. “A supercharging station with a capacity to park and charge 10 buses requires an investment of about ₹5–7 crore. CPOs are willing to invest in more chargers, but they also want assured demand from e-bus operators to make these chargers viable,” explains Hariyani. His company operates 550 supercharging stations.

Another relationship that has developed is between financiers, who have embraced the business model despite the high upfront cost, and operators.

A standard 13.5-metre seater-cum-sleeper electric bus costs ₹1.6–1.8 crore, according to multiple operators. The financier or lessor covers around 80% of the cost, with the operator chipping in with the rest. The operator repays the financier over a 5–8 year period in monthly payments, while also undertaking maintenance and paying manpower salaries using fare revenue.

But it takes a lot of forethought and groundwork to achieve the unit economics needed to make an e-bus operation profitable. “Since intercity e-buses run 500–600 km daily, the planning for charging solutions is critical,” says Hariyani.

Patwardhan says that once his company figured out a way to run an e-bus profitably, the path forward became clear. It involved ensuring that every e-bus runs as much as possible to make up for its high upfront cost. “The unit economics are key here. We have figured out that if our asset runs 15,000 km in a month, it can work. For it to run that much, your charging at depots needs to be optimised. Once that is done, the per km cost of operations is ₹4–5 lower for electric buses compared with diesel buses,” he explains.

Two kinds of chargers are generally considered by e-bus operators: those installed at both ends of a journey, and opportunity charging facilities located along the route, says Rohan Dewan, founder and CEO of Delhi-based bus operator LeafyBus. “We have depots on all our routes, so the bus can be charged at the end of every journey,” he adds.

LeafyBus operates multiple routes in North India connecting Delhi with cities such as Jaipur and Dehradun. Opportunity chargers, located at strategic points along highways, serve as supplementary charging infrastructure, and can typically extend the range of an electric bus by approximately 80–100 km.

But those chargers may not always come into play. While an e-bus has a range of 280–360 km on a full charge, intercity e-bus routes are mostly short: 50–150 km routes are the most common, although some 300–400 km routes are beginning to be covered now.

‘Sweating’ for the topline

After an intercity e-bus has been procured with financing support and planned charging solutions, the next part of the new compact is running the bus—‘sweating the asset’ in industry parlance—to generate the most revenue.

In sweating an e-bus, each operator has its own math. Sudhakar Chirra, founder and CEO of Fresh Bus, told Mint that each asset has to run 660 km every day for the company to be profitable.

“The biggest cell we use is a 420 kWh one, and it can comfortably ensure that the e-bus runs 350-370 km with no charge in between. Electric buses get the best unit economics when you sweat the asset properly. And it is very important to note that the demand for electric buses is not coming from passengers, it is coming from bus operators,” says Chirra.

Fast-charging solutions in depots are crucial for the unit economics to work, Chirra adds, noting that a 60 kW charger could theoretically charge a 420 kWh battery in seven hours, but that much downtime is not feasible in sweating the asset. His company operates 86 e-buses on routes to Bengaluru, Tirupati, and Vijayawada, among other southern cities.

An e-bus depot, where buses halt between journeys for charging and upkeep, is a good place to gauge the performance of an operator’s e-buses.

Mint visited LeafyBus’s depot in northeast Delhi, about 20 minutes away from the city’s main bus terminal at Kashmere Gate. “We dispatch our buses from here after charging them, and pick up passengers at Kashmere Gate,” Dewan told Mint over the loud ‘whoosh’ of an e-bus charging.

The activity of each bus is monitored digitally using cameras and vehicle telematics. “We track everything through an app, and our monitoring teams,” he says, pointing at a small digital camera in the driver cabin, and a device for telematics from the vehicle, to track the amount of charge left in the vehicle, its location, and so on.

While operators rely on telematics to improve a vehicle’s performance, financiers study the data generated to ascertain if the expensive electric asset they have funded is being used optimally to generate the revenue needed to repay the loan.

“EVs as an asset generate a lot of data, which can be monitored. For financiers and operators that have bet on electric buses, the vehicle needs to be tracked with a sort of P&L (profit and loss) statement, where not just the cost of running the vehicle, but the revenue generated is also monitored,” says Alpna Jain, co-founder and chief business officer (CBO) of Drivn, a Gurugram-based EV leasing platform.

“To track the revenues, we need to start by tracking specific routes. And on these routes, we have real time data in terms of occupancies, ongoing bus schedules that are running, patterns for weekdays and weekends, etc.,” says Jain. Her company has developed a data analytics platform to assist e-bus operators.

“These records will be able to show whether an asset is sweating fully, ensuring that the cost of operation remains low and revenues are maximised,” Drivn’s CBO explains. “By tracking ‘asset sweat’, lenders can identify underperforming assets early, validate underwriting assumptions, and proactively manage portfolio quality, well before any repayment stress becomes visible.”

Manufacturers get on board

With demand picking up, manufacturers, too, are trying to design buses specifically for intercity travel.

“Intra-city buses are designed for city commutes, shorter routes and high passenger throughput, prioritising quick acceleration, regenerative braking efficiency and optimal energy utilisation in dense urban environments,” says Nishant Arya, chairman of JBM Electric Vehicles, which sold the highest number of electric buses (1,282) in FY26, in a written response to Mint. “In contrast, intercity buses are engineered for longer distances, higher cruising speeds and enhanced passenger comfort for longer distances. They require larger battery capacities, and aerodynamically optimised designs to maximise range and efficiency.”

However, with additional features vehicle costs increse. “Intercity e-buses are typically more expensive than intra-city e-buses due to higher battery capacity, extended range requirements and additional comfort and safety features,” Arya adds.

This higher cost, however, needs to be seen in context of the benefits it provides in terms of longer battery life, effectively reducing the need for charging, and the total cost of ownership, says Arya.

Operators agree. “An intercity e-bus can cost me around ₹1.80 crore,” says Dewan of LeafyBus. “A low-floor intracity e-bus can cost around ₹1.20 crore. That’s a third lower.”

This higher cost, however, needs to be seen in context of the benefits it provides in terms of longer battery life, effectively reducing the need for charging, says Arya.

Other manufacturers that are in various stages of developing and deploying intercity e-buses, according to their public statements, include Tata Motors, Volvo Eicher Commercial Vehicles, and Hinduja Group’s Switch Mobility.

The new emerging business model for e-bus operators will develop as global battery prices decline, and charging technology matures and becomes widespread in India. However, experts say the foundational contractual relationships that have been formed today are likely to remain.

“Even if chargers are widespread and abundant, say two decades down the line, e-bus operators will continue utilising the services of charge point operators,” says Das of CSEP. “And those operators that have the investment appetite and long-term plans will find merit in setting up their own captive chargers.”