Impact of Introduction of Electric Vehicles on Financial Performance of BMTC

Abstract

This study evaluates the financial and operational implications of the Bangalore Metropolitan Transport Corporation\'s (BMTC) shift toward electric mobility, focusing on key performance metrics such as fuel efficiency, vehicle utilization, and fleet scheduling. Since 2019, BMTC has integrated electric buses into its fleet, aiming to improve operational efficiency. Using secondary data from BMTC’s records between 2019 and 2024, the study employs regression and correlation analyses to test hypotheses linking fleet composition, electrification, and operational performance. Findings reveal a significant increase in electric bus deployment, but a decline in fuel efficiency (KMPL) and vehicle utilization over time. A negative correlation between fleet size and per-vehicle utilization highlights potential deployment inefficiencies. The study also suggests that while electrification has progressed, it has not yet resulted in operational gains. This points to the need for enhanced route planning, charging infrastructure, and driver deployment strategies. The study underscores that electrification alone is insufficient to guarantee efficiency improvements and emphasizes the importance of strategic fleet and service optimization. Future research should explore cost-benefit evaluations and interaction effects to refine electrification strategies for public transportation systems.

Introduction

The Bangalore Metropolitan Transport Corporation (BMTC) is undergoing a transformative shift by integrating electric vehicles (EVs) into its fleet. This transition is expected to improve financial performance, enhance operational efficiency, and contribute positively to environmental goals. It is considered not just a technological shift, but a strategic, long-term business opportunity.

Key objectives include:

1. Assessing the financial impact of EV adoption on BMTC.

2. Evaluating changes in vehicle utilization efficiency from 2019–2024.

3. Analyzing improvements in fuel efficiency and identifying operational inefficiencies during the transition.

Benefits of EV Adoption

• Cost Efficiency: EVs offer a lower Total Cost of Ownership (TCO) over their lifetime due to reduced fuel and maintenance expenses, and government subsidies.

• Revenue Opportunities: Potential to earn from carbon credits, PPPs, and improved digital fleet management.

• Policy Alignment: Supports India's national and state-level sustainable mobility goals.

Challenges

• High Initial Investment: Significant capital is required for EVs and charging infrastructure.

• Infrastructure Limitations: Grid capacity, depot upgrades, and charging station availability are hurdles.

• Policy Dependence: Reliance on subsidies and regulatory support for financial viability.

• Operational Adjustments: EVs have limited range and longer charging times, affecting route scheduling and fleet reliability.

Stakeholder Impacts

• Commuters: Benefit from quieter rides, cleaner air, and potentially stable fares.

• Government & BMTC: Reduced long-term costs and alignment with climate goals.

• Private Sector: Gains in EV manufacturing, battery tech, and infrastructure.

• Environment/Public Health: Improved air quality and reduced emissions.

Literature Review Highlights

The literature spans several domains:

• EV Business Models: Highlight the need for holistic frameworks (Ziegler & Abdelkafi, 2022).

• Consumer Behavior: Preferences vary by demographics, with environmental and economic factors as key motivators.

• Technical & Environmental Studies: Reviews show that EVs reduce emissions and operational costs but depend on robust infrastructure and policy support.

• Developing Nations Focus: EVs, particularly two-wheelers, are more viable due to affordability (Rajper & Albrecht, 2020).

• Financial Metrics & Corporate Governance: Metrics like EVA and REVA are effective in assessing firm performance and value creation.

Technology Adoption Models (TAM) are also referenced to understand user behavior regarding new technologies like EVs.

Methodology Justification

• Data Sources:

  • Annual Reports: Reliable and standardized data for financial analysis.

  • Prowess Database: Detailed data on Indian public sector financials.

• Analytical Tools:

  • T-tests: To evaluate pre- and post-EV adoption financial changes.

  • Regression Analysis: To assess relationships between variables like fuel cost, investment, and financial outcomes.

  • Document Analysis: For contextual understanding and triangulation.

• Time Frame: 2019–2024 captures major policy changes and BMTC’s EV rollout.

• Sample Size: A sample of 50 is deemed statistically and practically appropriate for robust analysis.

References

[1] Ziegler, D., & Abdelkafi, N. (2022). Business models for electric vehicles: Literature review and key insights. Journal of Cleaner Production, 330, 129803. [2] Liao, F., Molin, E., & Van Wee, B. (2017). Consumer preferences for electric vehicles: a literature review. Transport Reviews, 37(3), 252-275. [3] Wolfram, P., & Lutsey, N. (2016). Electric vehicles: Literature review of technology costs and carbon emissions. The International Council on Clean Transportation. [4] Sun, X., Li, Z., Wang, X., & Li, C. (2019). Technology Development of Electric Vehicles: A Review. Energies, 13(1), 90. [5] Abid, M., Tabaa, M., Chakir, A., & Hachimi, H. (2022). Routing and charging of electric vehicles: Literature review. Energy Reports, 8, 556-578. [6] Rajper, S. Z., & Albrecht, J. (2020). Prospects of electric vehicles in the developing countries: A literature review. Sustainability, 12(5), 1906. https://doi.org/10.3390/su12051906 [7] Ralston, M., & Nigro, N. (2011). Plug-in electric vehicles: Literature review. Center for Climate and Energy Solutions. [8] Bacidore, J. M., Boquist, J. A., Milbourn, T. T., & Thakor, A. V. (1997). The search for the best financial performance measure. Financial Analysts Journal, 53(3), 11–20. https://doi.org/10.2469/faj.v53.n3.2081 [9] Nangih, E., Onuora, J. J. K., & Okafor, G. O. (2021). Accounting estimates and financial performance of listed non-financial firms in Nigeria. Journal of Accounting, Business and Social Sciences, 4(1), 15–37. https://doi.org/10.xxxx/jabss.2021.4.1.15-37 [10] Bertoneche, M., & Knight, R. (2001). Financial performance. Butterworth-Heinemann. [11] Nguyen, T., Locke, S., & Reddy, K. (2014). A dynamic estimation of governance structures and financial performance for Singaporean companies. Economic Modelling, 40, 1-11. [12] Mamic Sacer, I., Sever Malis, S., & Pavica, I. (2016). The Impact Of Accounting Estimates On Financial Position And Business Performance - Case Of Non-Current Intangible And Tangible Assets. Procedia Economics and Finance, 39, 399-411. [13] Venanzi, D. (2012). Financial Performance Measures and Value Creation: The State of the Art. Springer. [14] Setyawati, I., Suroso, S., Suryanto, T., & Nurjannah, D. S. (2017). Does Financial Performance of Islamic Banking is better? European Research Studies Journal, 20(2A), 592-606. [15] Chen, S.-C., Li, S.-H., & Li, C.-Y. (2011). Recent Related Research in Technology Acceptance Model: A Literature Review. Australian Journal of Business and Management Research, 1(9), 124–127. [16] Davis, F. D. (1987). User Acceptance of Information Systems: The Technology Acceptance Model (TAM). Working Paper #529. University of Michigan, School of Business Administration. [17] King, W. R., & He, J. (2006). A meta-analysis of the technology acceptance model. Information & Management, 43(6), 740–755. [18] Masrom, M. (2007). Technology Acceptance Model and E-learning. 12th International Conference on Education. Universiti Brunei Darussalam. [19] Chuttur, M. Y. (2009). Overview of the Technology Acceptance Model: Origins, Developments and Future Directions. Sprouts: Working Papers on Information Systems, 9(37). [20] Holden, R. J., & Karsh, B.-T. (2010). The Technology Acceptance Model: Its past and its future in health care. Journal of Biomedical Informatics, 43(2), 159–172. [21] Legris, P., Ingham, J., & Collerette, P. (2003). Why do people use information technology? A critical review of the technology acceptance model. Information & Management, 40(3), 191–204. [22] Kumar, S. Y. (n.d.). Electric Vehicles in Karnataka: Consumer Insights and Trends. [23] Khurana, A., Kumar, V. V. R., & Sidhpuria, M. (2019). A Study on the Adoption of Electric Vehicles in India: The Mediating Role of Attitude. Vision, 1–12. [24] Jhunjhunwala, A., Kaur, P., & Mutagekar, S. (2018). Electric Vehicles in India: A Novel Approach to Scale Electrification. IEEE Electrification Magazine, 6(4), 40–48. [25] Gujarathi, P. K., Shah, V. A., & Lokhande, M. M. (2018). Electric Vehicles in India: Market Analysis with Consumer Perspective, Policies and Issues. Journal of Green Engineering, 8(1), 17–36. [26] Navalagund, N., Mahantshetti, S., & Nulkar, G. (2020). Factors influencing purchase intention towards E-vehicles among the Potential Indian consumers- A study on Karnataka region. Journal of the Social Sciences, 48(3), 1597-1608 [27] Kumar, A. R., & Padmanaban, S. (2019). Electric Vehicles for India: Overview and Challenges. IEEE India Info, 14(2), 142-145. [28] Devi, R. S., Selvam, K., & Sudha, V. (2023). A Sales Trend Analysis of E-Vehicles (EVs) in India and Tamil Nadu. International Journal of Emerging Knowledge Studies, 2(10), 1- 10. [29] Chaturvedi, B.K., Nautiyal, A., Kandpal, T.C., & Yaqoot, M. (2022). Projected transition to electric vehicles in India and its impact on stakeholders. Energy for Sustainable Development, 66, 189-200. [30] Franke, T., Bühler, F., Cocron, P., Neumann, I., & Krems, J. F. (2012). Enhancing sustainability of electric vehicles: A field study approach to understanding user acceptance and behavior. In M. Sullman & L. Dorn (Eds.), Advances in Traffic Psychology (pp. [page range]). Farnham, UK: Ashgate. [31] Faria, R., Moura, P., Delgado, J., & de Almeida, A. T. (2012). A sustainability assessment of electric vehicles as a personal mobility system. Energy Conversion and Management, 61, 19–30. [32] Onat, N. C., & Kucukvar, M. (2022). A systematic review on sustainability assessment of electric vehicles: Knowledge gaps and future perspectives. Environmental Impact Assessment Review, 97, 106867. [33] Hossain, M. S., Kumar, L., Islam, M. M., & Selvaraj, J. (2022). A Comprehensive Review on the Integration of Electric Vehicles for Sustainable Development. In M. S. Hossain et al., A Comprehensive Review on the Integration of Electric Vehicles for Sustainable Development. Journal of Advanced Transportation, Article ID 3868388. [34] Orsi, F. (2021). On the sustainability of electric vehicles: What about their impacts on land use? Sustainable Cities and Society, 66, 102680. [35] Agarwal, P., Mittal, M., Ahmed, J., & Idrees, S. M. (2022). Smart Technologies for Energy and Environmental Sustainability. In Smart Technologies for Energy and Environmental Sustainability (Green Energy and Technology series). Springer. [36] Das, R., & Roy, P. (2023). Public transport electrification in India: Challenges and opportunities. Transport Policy Journal, 32(4), 147-162. [37] Ghosh, A. (2022). Economic impact of electric buses on Indian urban transport systems. Journal of Sustainable Mobility, 29(3), 89-104. [38] Ghosh, A., & Iyer, S. (2023). Impact of electric mobility on urban air quality. Environmental Research and Policy, 44(2), 78-94. [39] Government of Karnataka. (2024). Karnataka EV Policy 2024: A roadmap for sustainable mobility. Department of Transport, Government of Karnataka. [40] Gupta, M. (2023). Public-private partnerships in electric bus adoption: The Indian experience. Energy Policy Review, 27(1), 33-49. [41] Joshi, P. (2023). Commuter satisfaction in electric bus transit: A case study of Bengaluru. Journal of Urban Mobility, 11(2), 102-119. [42] Karnataka Transport Department. (2024). Annual transport report: Progress in electrification of Bengaluru’s public transport. Bengaluru, Karnataka. [43] Kumar, R., & Singh, V. (2022). Policy incentives for electric mobility: A comparative analysis of Indian states. Renewable Energy Journal, 56(5), 63-79. [44] Kumar, R., Mehta, A., & Sharma, K. (2023). Financial sustainability of electric bus fleets: A cost- benefit analysis. Journal of Transport Economics, 34(2), 55-71. [45] Mehta, A. (2022). Understanding the cost structure of electric public transport systems. Energy and Mobility Journal, 14(3), 110-127. [46] Mukherjee, D. (2023). Infrastructure readiness for electric buses: The case of Bengaluru. Urban Transport Review, 16(4), 87-101. [47] Sharma, K., & Patel, S. (2023). Transitioning to electric buses: Financial and operational considerations for Indian cities. Transport Research Journal, 21(3), 45-67. [48] Sharma, K., Patel, S., & Rao, L. (2023). Operational challenges in electric bus deployment: Lessons from Indian cities. Journal of Urban Transport Management, 18(1), 90-112. [49] Sundar, R., & Rao, L. (2024). High-capital investments in electric buses: A financial risk analysis for state transport corporations. Economic Policy Journal, 28(1), 130-148.

Copyright

Copyright © 2025 Sannidhi S Shetty, Pooja Takalkar. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.