Olectra Greentech to double e-bus production to 3,000 by 2024

The company has been in the headlines since it won India’s biggest e-bus order two months ago from Maharashtra State Road Transport Corporation (MSRTC).
Olectra Greentech Limited's electric bus. (File Photo | Express)
Olectra Greentech Limited's electric bus. (File Photo | Express)

Olectra Greentech, one of India’s leading electric bus manufacturers, plans to double its yearly output to 2,500-3,000 buses from 1,250 at present, said KV Pradeep, Chairman and Managing Director. The total output of the company would be in the range of 4,000-5,000, as it also plans to manufacture electric tippers, he added.

Speaking to a TV channel, the chairman also said the company has an order book of 9,000 buses.

“Earlier we had planned for 1200 buses to deliver by 2024, and currently, it's going as per the plan wherein we are going to deliver whatever we have bagged in the coming 24-30 months time,” Pradeep said.

The company has been in the headlines since it won India’s biggest e-bus order two months ago from Maharashtra State Road Transport Corporation (MSRTC). The company is scheduled to supply 5,150 buses at a price of over Rs 10,000 crores to the state government body.

Boosted by the win, the stock has been on a tear, and has more than doubled in value in the last six months.

To increase the output, the company is currently putting up new facilities that will take its total production capacity to 5,000 units per year.

The company has set up a manufacturing plant in Hyderabad with an annual production capacity of over 1,500 electric buses. It is also setting up additional plants in Himachal Pradesh and North India. The total manufacturing capacity is expected to reach 5,000 electric buses per year by 2024.

In May 2022, Olectra Greentech signed an agreement with the Assam State Government to supply 100 electric buses. These buses will be deployed in Guwahati over the next few months. This deal is part of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme promoted by the Indian government.

Pricing Challenges

Pradeep said the company currently imports most of the components by value, including the costliest of all — batteries.

“Battery alone will cost around 40 per cent and out of the remaining 60 per cent, 50 per cent has to be localized in accordance with the guidance given by the Indian government,” he said, adding that Olectra is already sourcing 60% of its non-battery components from India.

On price realization, Pradeep said a bus can cost between 1.25 crores to 2.5 crores.

Funding Plans

On finding the funds for the planned expansion, Pradeep pointed out that the board has approved Rs 800 crores of fund-raising, out of which Rs 400 crores will be invested by the promoters. “The rest will be open to banks and financial institutions for funding,” he said, adding that several financial institutions are showing interest. However, they will only make the best deal in the next three months, he said in an interview with CNBC-TV18. 

On the reports of the company entering the passenger vehicle segment, Pradeep said that will most likely not be done under the listed entity. 

In addition to manufacturing buses, Olectra Greentech will also establish charging infrastructure across India. It aims to set up over 1,500 electric bus charging stations in multiple cities. The company has partnered with various urban transport agencies to provide end-to-end electric mobility solutions encompassing vehicles, charging infrastructure and maintenance.

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