Tata Motors News: Tata Motors sweeps Rs 5,000 cr e-bus government tender

Tata Motors has swept the largest 5,450 electric bus tender worth Rs 5,000 crore, under which prices of the vehicles dropped by upto 40%. According to sources, the company emerged as the lowest bidder for all five categories of the tender floated by Convergence Energy Services Ltd, a subsidiary of state-run Energy Efficiency Services Ltd (EESL).

Other bidders in the race were Switch Mobility (the electric vehicle arm of Ashok Leyland), Evey Trans of the Olectra Group and VECV (a joint venture between
Volvo Group and
Eicher Motors) for the tender under Centre’s FAME II scheme, according to the sources. The sources said there was a margin of about Rs 10 between L1 and L2 bidders in all the categories.

“Prices discovered are the lowest ever and more importantly, at par with or very close to the operational cost of diesel buses. The lowest price discovered for a 12-meter bus is Rs 43.49/km, and a 9-m bus is Rs 39.21/km. This includes the cost of electricity for charging of the buses,” a statement issued by CESL on Tuesday said.

The bidding was held in five categories – 12 meter low floor AC and non AC e-buses, 12 meter Standard floor non-AC and 9 meter standard floor AC and non-AC.

“We are delighted to learn that we are the lowest bidder for the prestigious tender from Convergence Energy Services Ltd (CESL). Tata Motors is committed towards providing green, safe and sustainable transport solutions across the country. We await a formal communication from CESL,” a Tata Motors spokesperson told ET.

For 12m low-floor AC e-bus, Tata Motors quoted Rs 47.49/km per vehicle and Rs 43.49/km for 12-m low-floor non- AC e-buses. Tata Motors bid Rs 44.99/km per 12-m standard floor AC e-bus. Switch Mobility stood as L2 for three categories with a bid of Rs 53.99/km.

Tata Motors bid Rs 41.45/km per 9m standard floor AC e-bus and Rs 39.21/km for same size non-AC e-bus.

Evey Trans stood as L2 for 9m e-bus, quoting Rs 54.27/km for the AC category and Rs 53.12/km for non-AC category.

The CESL statement said the value of the tender is over Rs 5,000 crore. The buses are expected to operate around 4.71 billion km over twelve years saving 1.88 billion litre fossil fuel. This will result in 3.31 million tonnes of CO2e from tailpipe emissions, a major step towards mitigating climate change.

The buses will benefit from the central government subsidy offered under the remodeled FAME II scheme administered by the Ministry of Heavy Industries. “With the very low discovered prices under the Grand Challenge, a savings of approximately Rs 361 crore of national subsidy can be realised, which in turn may be utilised for additional buses,” it said.

The contract term is 12 years, with assured kilometers of 10 lakh per bus, and a credible payment security system. The tender process was started in July 2021 under which nine cities are eligible to receive subsidy under the remodeled FAME II Scheme. Of these, five participated in this tender.

CESL managing director Mahua Acharya said that the rates witnessed in the tender make electric buses extremely competitive across the country. The Grand Challenge will certainly encourage the faster transition to green mobility across the country while creating a synergy between private operators and state governments, she added.