Indra Traders sees electric buses within reach if tax structure aligned

 Sri Lanka could see electric buses joining its public transport fleet sooner if tax concessions already available to electric cars are extended to electric commercial vehicles, with Indra Traders (Pvt) Ltd hopeful the next budget will address the matter.

Speaking to Mirror Business on the sidelines of the opening of the company’s new Foton service centre,  Indra Traders (Pvt) Ltd  Managing Director Rushanka   Silva noted that operators were keen to make the switch, although the numbers were yet to work for them under the prevailing structure.

“There are people who would like to buy. What has happened is that it does not match with the current tax range,” he remarked.

He pointed out that electric cars now attract a lower duty than a conventional petrol vehicle, whereas the commercial segment is yet to see a similar alignment, and indicated that the company intends to discuss the matter with the authorities.

As per the gazetted excise duty rates, a brand new electric car with a 150kW motor attracts Rs.36,200 per kW, or Rs.5.43 million, which is less than half of the Rs.11.52 million charged on a 1,800cc petrol car. However, a bus with 25 or more seats pays a flat Rs.1,810,900 per unit irrespective of whether it runs on diesel or electricity, leaving the costlier electric model without any offsetting relief. 

Meanwhile, electric goods vehicles are taxed on motor power while their diesel counterparts pay a flat rate. An electric lorry with a 150kW motor would attract Rs.60,400 per kW, or Rs.9.06 million, compared to Rs.1,207,250 on a diesel lorry of over five tonnes, which works out to 7.5 times as much.

Imported vehicles, including buses, goods vehicles and electric models, are also subject to an effective customs import duty of 45 percent until December 31, after a 50 percent surcharge was levied on the 30 percent base rate in May and later extended.

Elsewhere in the region, Pakistan charges a customs duty of just 1 percent on fully built electric buses and trucks. Bangladesh, in its latest budget, moved to remove the 5 percent withholding tax on electric bus and truck imports and to extend tax incentives for such vehicles until June 2030. India, which builds its own buses, has set aside INR 43.91 billion to support 14,028 electric buses for state transport operators.

Silva identified the battery as the most important component of an electric bus and observed that Chinese manufacturers now back their batteries with warranties of five, eight and even ten years, which suits a commercial buyer who typically looks to recover the investment within about five years.

“If we can offer something like that, I think we can make a considerable difference,” he opined.

He acknowledged that the battery technology makes such buses considerably more expensive, and he was yet to work out what an electric bus of comparable size would cost here.

Indra Traders has brought in between 150 and 200 Foton buses so far, with 104 going to Lanka Metro Transit, making that single order over half of the buses the company has put on the road.

The company runs six fully owned service centres and plans to widen both that network and its dealer network, while carrying a spare parts stock worth over Rs.200 million. On the prospect of local assembly, he was non-committal.