P.B. Balaji, the group CFO of Tata Motors, advocated for an asset-light approach to be used for procuring e-bus sector in India. During a conference call with the media following the results, he made the case that Original Equipment Manufacturers (OEMs) had to prioritise effective operation over obtaining ownership of the vehicles that are the subject of government tenders.
Over the following four to five years, the company wants to install 50,000 e-buses. The NCC model places financial risk on private operators to handle fare collecting and pay for running expenses.
Balaji highlighted how crucial it is for OEMs to have an asset-light approach on such big projects. With an estimated cost of Rs 1 crore for each e-bus, 50,000 buses would require a total expenditure of Rs 50,000 crore.
“We don’t have a balance sheet of that size. No OEM will have a balance sheet of that size” said Balaji. “Furthermore, it is not supposed to be on the balance sheet of OEMs but it should be on that of the leasing company” he added.
Owning the e-buses would strain OEMs’ financials and potentially impact stock prices, according to Balaji. “The entire returns metrics goes out of the window and that would see us pressure on the stock prices. So we have to be careful about that.”
Balaji’s comments highlight the ongoing debate around risk allocation in India’s e-bus rollout. The government aims to accelerate electric bus adoption, but OEMs are wary of large upfront investments and operational risks associated with owning the vehicles.