Friends, we celebrate tenders in India. Let’s do it — 5,000 buses, 10,000 buses for us. Looks like a revolution has come. But please look beyond the border. China — how many electric buses run in just one city there? From 16,000 more. From all over India in one single session, there are more electric buses in China. And there, the Yutong name matters — it’s not just about numbers. There is a company that makes so many buses, and it knows exactly what work has started.
Waterproof buses — IP68 rated. Even if the bus is submerged in water, the battery will not short. And nitrogen cooling systems are being used so that the battery should never catch fire. This is scale. This is R&D. And well, somewhere in India we are in this — we have definitely entered the race, but right now we are a little behind. But our way is a little different. I tell you how.
Why India Is Not Buying Electric Buses — The ₹1 Crore Problem
We are not buying buses. Our state governments and state transport corporations are to a large extent bankrupt. So we started a new rental model. Who made Tata and Ashok Leyland rocking the old kings, and gave birth to four new players? Today, Grow Age with Jayant Mundra — this is what we will decode: Shan Versus India (China vs India). Who is walking and who is driving your electric bus? Desi brand or Chinese tech? And 6,500 buses to be held in March — in the new tender coming for buses, whose game is it going to be over? Let’s start.
So the first question is: India vs China? Why is India not at China’s level? Because our country has a shortage of capital. As I told you, our state transport undertakings — which are like DTC (Delhi Transport Corporation) or Mumbai’s BEST — a lot of them over the years have had losses. Their money goes away in diesel and pension.
A diesel bus comes for ₹40–50 lakh. But an electric bus comes for ₹1–1.5 crore. Sometimes it reaches even ₹2 crore.
And our governments do not have so much money that they could buy 10 such buses for every city. So the government came up with a new model. It told the manufacturers: we just won’t buy. We will buy kilometres from you. This is called the GCC model — the Gross Cost Contract.
The Taj Hotel Analogy: Understanding The GCC Model
Forget the buses for 2 minutes to understand this model. Take a look at real estate finance. Recently Blackstone — which is among the world’s largest asset managers — bought a luxury property in Udaipur. A big stake in a hotel project. The name of that hotel is Taj Udaipur Aravali. When you go there you will find the Taj logo everywhere. The staff will be of Taj. Taj will be written on the napkins.
But the truth is that the Taj Group is not the owner of that property. That property belongs to the Ishan Group of Mumbai, and now Blackstone has invested in it. Taj there only works as an operator. It is a management contract on someone else’s building, and the risk is not anyone else’s but the brand Taj’s.
The government did exactly the same with buses also — the Asset Lite Model. First, the model of the government was capex-heavy. If you want 1,000 buses, then you needed ₹1,500 crore kept on the table earlier. With the government there was no liquidity. So it made the model opex-heavy — in it the operator will drive the bus, will bring the driver, and will also pick up the risk.
The government will only pay the rent of ₹54 per km. The government has abolished the complete asset ownership model. Now, be it a Tata or Olectra bus, the government is just a subscriber.
The Tender That Shook The Industry: 10,900 Buses, 4 Unknown Winners
When the government did this, when the rental model was announced, market experts had given predictions with their eyes closed. They said if there is a tender for the bus then obviously Tata Motors will win, or else Ashok Leyland will win. After all, since 70 years they rule the roads of India.
But friends, when the PM Electric Bus Service opened the massive tender — 10,900 electric buses with a contract for more than ₹10,000 crore — the old industry did not get it. Big legacy companies were left standing on the sidelines, and those four names won which no one until tomorrow would consider as a bus joint.
- Olectra Greentech — silently increasing its capacity
- JBM Auto — used to make parts till yesterday, today makes the entire bus
- PMI Electro — the dark horse
- Eka Mobility — the newest challenger
These four have started a price war together. Where the old players sat with brand value and legacy cost, there were these new challengers who were betting so aggressively that established players had to get out of the game.
The “Global Shortcuts” Strategy: Where Did The Tech Come From?
But here a very big question arises. Tata and Ashok Leyland have decades of R&D experience. There are thousands of engineers. These new players who were born yesterday — where did they suddenly get all this overnight world-class technology from?
So friends, the answer to this question hides in a strategy I call the Global Shortcuts. These new players had understood one thing. If we start R&D from zero today, if we design the engine and battery, we will test — it will take 10 years. And the tender is open today, and 10 years after that we will not be able to compete with Tata, we will not be able to compete with Ashok Leyland. So instead of inventing, it felt better to partner.
Player-by-Player: Who Partnered With Whom?
| Indian Player | Global Technology Partner | Key Technology |
|---|---|---|
| Olectra Greentech | BYD (China) | LFP “Blade” battery |
| PMI Electro | Photon (China) | EV drivetrain |
| JBM Auto | Solaris (Europe) | Bus platform, later localized |
| Eka Mobility | VDL (Netherlands) + Japan | Bus technology + battery |
What Was Tata Motors Doing All This While?
Now you will ask — when is all this happening, what were Tata Motors and Ashok Leyland doing? Were they sleeping?
Well the answer is no. They were fighting their own battle. Tata Motors and Switch — your own proprietary technology. When we play on technology, it’s not about sales, it’s about the battery. She doesn’t want to depend on a Chinese partner except for sale and battery. So in the beginning Tata flatly refused to participate in many tenders. And until Tata fought the system, by then Olectra and JBM had taken advantage and captured the market. However, now Tata is back in aggressive mode.
The Bitter Truth: “Assembled In India”, Not “Made In India”
But friends, keep emotions aside and understand a little bitter truth. Are these buses really made in India?
The condition is as it is — well, the body is desi, yes, but the heart is completely foreign. Look at what your eyes can see: steel body, chassis, glass, tyres, seats — all this is 100% being made in India. JBM has a massive plant in Haryana, and there is also a factory of ITRA in Hyderabad, near Sitarampur. Manufacturing is absolutely real.
But the bus’s most expensive part is its heart — i.e. the battery. Cells and Battery Management System (BMS) — that today comes packed in big containers from China and East Asia. We have become champions in assembly, but we couldn’t do the core technology. It is assembled in India — the transition phase from ‘Made in India’. Well, we’re somewhere in the middle of that right now.
The ₹600 Crore Battery Bet: The Most Dangerous Plot
Now that we have understood all this, comes the most dangerous plot of this story. That’s financial math with a twist.
When the tenders opened, the prices were announced at ₹54 per kilometre. So the complete industry went into shock. Why? Because the cost of running an old diesel bus comes to about the same amount. But a diesel bus has an advantage as well. Its engine lasts for 12 to 15 years. It needs some repair, but there is no need to change. The story is completely different with electric buses.
Operators here have been playing bets worth one trillion rupees. A bet that if it fails, this company may not even be able to survive the next decade.
The Two Problems No One Talks About
First: The contract signed with the government is for 12 years. That means the operators have written it down that “I will run on the streets for the next 12 years.”
Second: In India’s conditions — 45° heat, dust, and bumper-to-bumper traffic — a lithium-ion battery’s life cannot be 12 years. Even industry people say this — barely five to seven years of life will happen.
Do you understand what this means? In the middle of the contract, when the bus is half its life must have been lived, its heart will stop beating. The range will drop, it will just stop moving. The operator has no other option that day. By removing the old battery, another new battery will have to be installed.
This 12-metre bus, which uses the battery of an 18-metre bus, replacement costs ₹60 lakh to ₹90 lakh.
Just think. By a bus you earned some profit in 6 years, but within 1 day he had to buy batteries and he was completely blown away. If operators have 1,000 buses, each bus costs ₹60 lakh — even if the expenses are incurred, it will be a bill of ₹600 crore — and the government will not give this money. This will come from the operator’s own pocket.
The Deflation Bet: Why Companies Are Actually Smart
So you will think that these companies are a bit stupid. They must know their work. They signed the contract just like that. And I say this is absolutely correct.
The bet here is that this is a deflation bet. Companies are betting that the price she is giving today, she fixes in these deals, will remain. But the future price of the battery will change.
- Batteries today come at around $140 per kilowatt.
- But after 7 years, by the time we have to buy a new battery, the technology would have become so cheap that the price will probably drop to $80.
- That means, what is worth ₹60 lakh today, in 2030 we maybe will only get for $30 lakh.
If battery prices rise dramatically, in case of collapse, these operators will save money and earn super profits. But if lithium becomes expensive, if China stops exports, if the price increases beyond $140, then this expenditure of ₹600 crore will become an unfunded liability. Balance sheets will burn.
So the reality is that they are not just carrying passengers. They are running by short-selling global prices of lithium. And there are still 6–7 years left for the results to come.
Why Chinese Tech Fails In Indian Heat: The Delhi Test
But friends, a strategy made on an Excel sheet often dies on the streets. So here we have to remember one thing about China. You can bring Chinese technology to India, but you can’t bring China’s weather to India.
Remember the heat of Delhi — the temperature goes up to 45 to 48°C, sometimes even crosses 50°C. In such heat, not only humans but also batteries are at risk of heat stroke.
When the bus hits the road, they have to face a double penalty:
- On one side: In the cabin, to keep passengers cool, the AC runs on full blast.
- On the other hand: The Battery Management System has to keep the liquid cooling pump running to cool the battery so it doesn’t explode.
And this parasitic load itself drains the battery — consuming 25% of energy. The result: range anxiety. The 200 km on paper becomes barely 150 km in reality. Drivers will have to find the charging station midway — and when the bus stops, not only are the passengers troubled — the operator’s bank account also cries.
The Pune Evidence: ₹55 Crore Fine
Its biggest evidence we found in Pune. The authority did not accept that the heat was too much or that there was no technology. It read the contract and imposed a historic fine of ₹55 crore on Olectra Greentech’s project. Why? Because 45 buses had broken down within 45 days.
The Hidden Problem: Depots Without Power Grids
But the story doesn’t end here, friends. There is one more problem — and this no one writes in the brochures. That is upstream infrastructure.
A household electric scooter of 5 amps gets charged in the socket. But when you are charging commercial EVs, a big bus, then the game becomes Physics.
A standard electric bus battery is approximately 200 kilowatts.
When 100 such buses come and park together at night in a depot, and everything starts charging together, then the power demand goes into megawatts.
Let me tell you in technical terms: there, no normal electricity connection is required. Here a dedicated 11 kV to 33 kV substation is required. Our depots are not designed for this load. They were made for parking diesel buses. There are no high-tension cables, neither are there transformers.
So you understand, right? Now operators have to build a mini-grid at the depot too. There are two big problems:
- Cost — it would cost crores of rupees to install a substation.
- Bureaucracy of DISCOMs — the power distribution companies are not ready to increase the sanctioned load so quickly.
In many cities there are reports that where buses have been delivered, there is no connection at the depot. Diesel generators are running to charge the electric bus. What’s bigger than irony can only happen? It’s a dead-end for the operator’s investment. The bus is ready, driver ready, but where is the grid?
This is that implementation lag which occurs on the actual ground — not visible in the math shown on paper. But the Internal Rate of Return (IRR) completely takes you into the negative. This is the bitter truth of the GCC model.
Why Tata Motors Returned To Tenders: The Payment Security Mechanism
But for now, despite all these challenges, this game does not stop. The game is getting bigger. Now all eyes are on March.
The government has recently closed a mega tender of 10,900 buses, and now another big tender is coming — 6,500 buses will be closed in March. Another new tender in which so many buses will be given to three big cities. This tender will decide who will become the next king — companies like Tata Motors and Ashok Leyland, or newbies like JBM and Olectra.
But the question is: Tata and Ashok Leyland, which were running away from tenders for the last 2 years — why have they come back suddenly? It is not so that their heart has melted. Not at all. Risk assessment is not heart in business.
Their fear was that state transport undertakings like Delhi’s DTC or Mumbai’s BEST have very bad financial health. These people are not able to pay salaries on time. Tata’s wanted to say that we have installed thousands of buses, and if the municipality gave us time for 6 months and the rent is not paid, then we will become NPA.
The Policy That Changed Everything
To end this fear, the Central Government intervened and made a game-changing policy — the Payment Security Mechanism. This is basically a sovereign guarantee.
The government has created a dedicated fund, and the logic is very simple and ruthless:
- If any state municipality does not pay money to the operator, the operator will not have to go to court.
- The central agency will pay the operator from dedicated funds.
- But in return, RBI of that state will withdraw money from the Central Government.
That is, with the state government there is no option left to default. If you want electric buses, you will have to pay on time. If you do not do this, the mechanism will be triggered. And this three-party agreement has made the fulfilled system bankable.
Therefore, the tender which is being issued in March will show you old shares in that field.
The Real Battle Begins: Capacity, Not Technology
Friends, this is no longer a battle of technology. This is a battle of capacity. Who has the factory ready, and who has the battery supply sorted — and this tender could be won.
So what is the word? From India, the EV revolution has started. But this is not as smooth as China. We have given up ownership and learned smart renting and have taken a step towards a new model. We have seen old joints being replaced by new players.
But the real challenge begins now. We will have to do R&D in India like China’s Yutong. We have to bring such buses which can bear both Delhi’s heat and Mumbai’s rain. We cannot do our work by just copying Europe or Chinese tech.
Next time you see that electric bus on the road, look who is moving forward silently. Remember the global partnerships behind it.
There are tenders worth trillion rupees, and a high-stakes gamble on lithium prices is going on.
Frequently Asked Questions
What is the GCC model in electric buses?
The Gross Cost Contract (GCC) is a public-private partnership model where the government pays the operator a fixed per-kilometre rate (₹54/km) instead of buying the buses outright. The operator owns, runs, and maintains the bus.
Who are the 4 new electric bus players in India?
Olectra Greentech (BYD partnership), JBM Auto (Solaris tech), PMI Electro (Photon partnership), and Eka Mobility (VDL technology). Together they won the 10,900-bus PM e-Bus Sewa tender.
Why is Tata Motors back in the electric bus tender?
Thanks to the Payment Security Mechanism — a sovereign guarantee that ensures operators get paid even if state transport corporations default — Tata Motors’ NPA risk is now covered, making tenders bankable again.
What is the biggest risk in India’s electric bus gamble?
Battery replacement cost. A 12-metre bus battery costs ₹60 lakh to ₹90 lakh and needs replacing every 5–7 years, while the contract is for 12 years — creating a potential ₹600 crore liability for large operators.
