Meanwhile, the rally in the stock was also led by the government’s plan to replace 800,000 diesel buses, more than a third of all buses on the road, with electric ones over the next seven years. Apart from lowering vehicular emissions, this is also expected to catalyse investments in the electric vehicle (EV) ecosystem in the country.
The replacement plan includes 200,000 electric buses for state transport undertakings (STUs), 550,000 for private operators, and 50,000 for schools and employee transportation by 2030, top government sources told ET.
Designed to electrify the country’s public transport systems, the plan is likely to replace the third leg of the Faster Adoption and Manufacturing Electric Vehicles (FAME) incentive programme and pitch India as a global manufacturing hub for EVs.
“Replacing diesel buses with electric ones will not only address environmental concerns but also help create an ecosystem for electric vehicles,” said one of the persons cited above.
“It will accelerate the establishment of a widespread charging infrastructure, generate investments, bring about scale, which will reduce per-unit cost, and simultaneously create jobs in manufacturing.”
At 11.19 am, the scrip was trading 5.5% higher at Rs 796 on BSE. On a year-to-date, the stock has rallied 101% and doubled investors’ wealth.”Tata Motors witnessed a 8-year breakout on the monthly charts around 550-560 levels and has run up strongly since then. It has shown strong outperformance against its 4-wheeler peers. While the stock has the potential to go higher, short term traders are advised to book profits. The long term targets are seen around 900 levels where a cluster count target on point and figure charts is placed,” Gaurav Bissa, Vice-President at InCred Equities, said.
Meanwhile, apart from Tata Motors, Olectra Greentech, Ashok Leyland, and JBM Auto also rallied 3-6%.
According to industry estimates, Rs 1.2-1.5 lakh crore capital will be required to roll out 100,000 electric buses in the country at present prices. The government is in the process of consulting stakeholders to draw up the contours of the scheme that may be unveiled next fiscal year.
There have been two meetings of top government officials and representatives from multilateral institutions on how to aggregate and convert the demand, a senior official aware of the development told ET, adding that the focus of talks has been on placing large procurement tenders to lower the per-unit cost and distributing the vehicles to existing transporters.
Around 4,000 electric buses are running on Indian roads today, compared with 2.3 million diesel and CNG buses operating in the country.
“India currently has about 2,300,000 buses, of which 140,000 are run by public transport authorities. The conversion of private buses to electric is an important step in India’s decarbonisation efforts,” said Saurabh Kumar, vice president, the Global Energy Alliance for People and Planet (GEAPP) in India.
The development comes at a time when the Indian government, along with the US, announced plans at the COP28 Summit in Dubai to set up a joint payment security mechanism (PSM) for deploying 38,000 electric buses in the country to achieve net zero targets.
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