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Goldstone-BYD, Tata Motors grab E-Bus contracts

Tata MotorsNSE -0.76 % and a joint venture between Hyderabad-based Goldstone Infratech and China’s biggest e-vehicles seller BYD have bagged electric bus supply contracts for nine out of 10 cities, leaving rivals such as Mahindra & Mahindra, Eicher Motors and JBM Solaris empty handed. 

Competition termed some of the winning bids as unviable, saying that the two players quoted nearly 30% lower than the market price. The winners exuded confidence though. The development revs up the e-vehicle market in the country.

Goldstone Infratech’s joint venture with Warren Buffett-backed BYD, which is described by many as China’s Tesla, bagged contracts of Bengaluru, Mumbai and Hyderabad to supply 290 electric buses.

Tata Motors emerged the lowest bidder for contracts in six cities — Jaipur, Indore, Lucknow, Kolkata, Jammu and Guwahati — to supply 190 e-buses. Ashok LeylandNSE 1.42 % bagged contract for 40 e-buses in Ahmedabad. The 10 cities called tenders in the last two months in a pilot programme partly funded by the central department of heavy industries.

Delhi is yet to come out with a tender to procure 700 e-buses using state budget, people familiar with the development told ET.

The government is encouraging e-vehicles with its Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) scheme, which provides 60% subsidy to cities to procure e-vehicles either as outright purchase or on supply-operate basis.
Given the different tender conditions in the 10 cities, there was a huge variation in prices discovered under both models, sources said.

Tata Motors placed the lowest bid of Rs 77 lakh per bus for a 40-bus outright purchase contract placed by West Bengal Transport Corp for Kolkata. The company placed bids varying between Rs 77 lakh and Rs 99 lakh for different models. “The price quoted by Tata Motors is an unviable number for many original equipment manufacturers (OEMs),” said an executive in one of the auto making firms.

“The Rs 77 lakh bid was a desperate attempt from the company after they lost to Goldstone-BYD in Karnataka,” the person alleged, speaking on condition of anonymity.

At current market rates, similar models could cost between Rs 1.2 crore to Rs 1.7 crore, depending on specifications, industry insiders said. Girish Wagh, president of commercial vehicle business at Tata Motors, however, said the company has a clear line of sight of profitability and remains committed to invest in the sector. He said Tata Motors has been investing extensively in research and development of electric vehicles for past decade.

“We have taken a longterm view regarding electrification as we believe that sustainability and development of full EV ecosystem would hinge on strong participation of local players who invest in end-to-end value chain,” Wagh said.

Goldstone-BYD placed bids as low as Rs 29.28 per km to bag a supply-operate contract for Bengaluru, followed by Rs 36 per km bid for Hyderabad. “This is an aggressive entry pricing strategy,” said another bidder on the condition of anonymity. “I don’t think it will make commercial sense for any OEM to sell their bus at this price.”

Goldstone Infratech and BYD could not be immediately contacted for comments.

BYD has grown spectacularly in the decade after Buffett invested $230 million in what was then a little-known maker of mobile phone batteries.

The department of heavy industries had in December 2017 sanctioned Rs 440 crore to 11 states for procurement of electric buses, electric taxis and e-autos as a pilot project under FAME scheme. The sanction was for procurement of 390 buses — 40 buses per city, except 15 buses each for Guwahati and Jammu.

Bengaluru, however, called tenders for 150 buses while the Telangana State Road Transport Corporation in Hyderabad sought bids for 100 buses.

Electrical Suppliers India

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