Olectra Aims To Be A Major Player In The Electric Bus Market
Olectra Greentech Ltd (OGL), a prominent electric bus manufacturer, is aiming to solidify its position in the Indian electric bus market by securing a quarter of the total e-bus deliveries in the next two years. The company expressed its confidence in achieving this goal during its Q1FY24 earnings call. The anticipated e-bus deliveries across the market are projected to reach 40,000 to 50,000 units over the next two years, and Olectra Greentech aims to contribute one-fourth of this volume.
The company”s determination stems from its robust product lineup and proven technology, evidenced by over 1,250 buses covering more than 120 million kilometers on Indian roads. Sharat Chandra, the Chief Financial Officer of OGL, emphasised that their technology has instilled customer confidence and fulfilled customer demands.
A recent major achievement for Olectra Greentech was a substantial e-bus order obtained through a consortium with Evey Trans Private Ltd. This consortium secured a contract from the Maharashtra State Road Transport Corporation (MSRTC) for the supply, operation, and maintenance of 5,150 electric buses. This achievement boosted OGL”s order book to 8,344 units after delivering 75 e-buses in the first quarter of the fiscal year.
Expecting orders from additional transport corporations, the company”s total order book is predicted to exceed 10,000 units. OGL has also successfully obtained battery compliance certifications for all its models after undergoing stringent testing due to new safety norms introduced by the Indian government. Although these tests led to delays in e-bus deliveries, the company is confident in making up for lost time and accelerating its delivery schedule.
Regarding fundraising plans, OGL is exploring opportunities despite the current market conditions, seeking both institutional and financial investors. Noteworthy investors like Nomura, Jupiter, Black Rock, and Goldman Sachs have already invested in the company.
Olectra Greentech is optimistic about fulfilling all its orders in the next two years by establishing a new greenfield plant with a production capacity of 5,000 units annually, scalable up to 10,000 units per year.
Addressing recent developments involving BYD”s EV proposal being rejected by the Indian government, OGL expressed a strong and ongoing relationship with BYD and indicated a desire to extend this partnership beyond 2025.
Internally, OGL is focused on expanding its product portfolios through a dedicated R&D team of over 50 experts. The company collaborates with BYD to acquire knowledge and develop new offerings. While sourcing battery cells and critical powertrain components from BYD, OGL has also localised a significant portion of the required manufacturing components. The government”s support is facilitating the domestic production of batteries within the next 2-3 years.
Driven by government initiatives, the adoption of e-buses in India has surged over the past couple of years, despite an overall decline in bus industry volumes during the pandemic. Under the FAME II scheme, 6,740 e-buses were sanctioned by October 11, 2022, and there are plans to deploy over 4,200 more e-buses. This scheme has been extended until March 2024. E-bus penetration in the market was around 7% in FY23, with projections of growth to 11-13% in FY25 and a remarkable 40% in FY30, as estimated by rating agency ICRA.
