Viability of electrification of urban public transportation : a financial assessment and sensitivity analysis study

Abstract

Electric Mobility is being touted as the solution to India‘s predicament of growing urbanisation and air pollution along with dependence on crude oil imports. The most effective segment here is the electric buses segment which can play a role in significantly reducing GHG emissions, particularly in public transport. India as a country has many favourable factors to support transition towards electrification of its public transport bus fleets.

Through this study the author has analysed the value chains under existing EV policies at state level as per van der Steen framework adopted by the World Economic Forum. After identifying the research gap, the scope of the study was limited to financial assessment and sensitivity analysis. For this part, the city level data (Bengaluru level) was collected from BMTC i.e. Bengaluru Metropolitan Transport Corporation and the financial assessment was carried out by adapting the methodology from World Bank (under the report titled ‘The Economics of Electric Vehicles for Passenger Transportation, 2022). This approach looks at the ‘net social cost’ of adopting electric vehicles, in our case, electric buses, across present stage and in the year 2030. The inclusion of externalities and fiscal wedge in this assessment helps to identify underlying nuances. In addition, the total cost of ownership approach is also employed to compare the scenarios.

Subsequently, the sensitivity analysis is carried out to verify the robustness of the results. The outcome is that viability of electrification of urban public transportation i.e. public buses, has been established through this study.