India’s urban public transport landscape is on the cusp of a profound transformation as the nation’s leading electric bus manufacturers gear up for a monumental government tender, seeking to deploy 6,230 electric buses across five major cities. Valued cumulatively at over ₹6,000 crore (approximately $725 million USD), this initiative, spearheaded by Convergence Energy Services Ltd (CESL), a government of India undertaking, marks a significant stride in the country’s ambitious clean mobility agenda. The tender documents, publicly released on January 9th, delineate a strategic push to electrify urban transit, with bid submissions open until March 10th, setting the stage for an intense competitive battle among established automotive giants and agile new-age players.
The allocation of these thousands of electric vehicles underscores the pressing environmental challenges faced by India’s metropolitan centres. Delhi, frequently grappling with severe air pollution, stands to receive the lion’s share of 3,330 electric buses, a crucial measure aimed at mitigating vehicular emissions that contribute significantly to the capital’s deteriorating air quality. Following Delhi, Mumbai is slated for 1,500 units, Pune for 1,000, while Hyderabad and Ahmedabad will each incorporate 200 electric buses into their public fleets. This geographic distribution highlights a focused effort to address pollution hotspots and provide cleaner, more efficient transport solutions in some of India’s most populous and economically vital cities. The tender encompasses a diverse range of configurations, including 7-metre, 9-metre, and 12-metre electric buses, available in both AC and non-AC variants, designed to meet varied operational requirements and passenger comfort levels.
This latest procurement round follows closely on the heels of the PM E-Drive scheme’s largest-ever tender for 10,900 electric buses, which concluded just weeks prior. The outcomes of that previous tender sent ripples through the industry, with newer entrants like PMI Electro Mobility and Eka Mobility securing over two-thirds of the total contracts, demonstrating aggressive pricing strategies and manufacturing agility. PMI Electro Mobility alone clinched contracts for 5,210 e-buses, while Eka Mobility secured 3,485 units. Among the more established players, Olectra Greentech, a subsidiary of Hyderabad-based Megha Engineering, managed a partial victory, securing orders for 1,785 e-buses. This dynamic shift in market share has heightened the stakes for the current tender, particularly for legacy automotive manufacturers like Tata Motors, Switch Mobility (a subsidiary of Ashok Leyland), and VE Commercial Vehicles Ltd (a joint venture between Volvo Group and Eicher Motors), who notably missed out on significant portions of the previous large-scale contracts.
The competitive landscape in India’s electric bus sector is rapidly evolving. The previous tender saw industry stalwarts such as Tata Motors and VE Commercial Vehicles Ltd fail to secure a single e-bus order, a stark departure from their historical dominance in the conventional bus market. Ashok Leyland, another major player, faced a different challenge, alleging technical glitches prevented its participation in the bidding process, a matter that has since been taken to the Delhi High Court. This context makes the current 6,230-bus tender exceptionally critical for these traditional manufacturers to regain lost ground and reassert their presence in the burgeoning electric mobility segment. While participation remains at the discretion of individual companies based on their existing capacities and order books, the strategic imperative to secure a share of this market is undeniable.
The financial scale of these tenders is substantial. With electric buses typically ranging in price from ₹85 lakh to ₹1.8 crore per unit, assuming an average price of ₹1 crore per bus, the current tender alone is projected to generate business worth well over ₹6,000 crore for manufacturers. This significant capital infusion is critical for driving innovation, expanding manufacturing capabilities, and accelerating the transition to electric mobility. The government’s preferred procurement model, the Gross Cost Contracting (GCC) mechanism, plays a pivotal role in this ecosystem. Under the GCC model, payment to operators is made on a per-kilometre basis over a predetermined period, typically 10-12 years. This arrangement de-risks the investment for state transport undertakings (STUs) by shifting the onus of vehicle procurement, operation, and maintenance to private fleet operators. In turn, electric bus manufacturers typically partner with these fleet operators, allowing automakers to focus on core manufacturing and technological development without burdening their balance sheets with fleet ownership. This collaborative model, as Sanyam Gandhi, Whole-time Director at Chartered Speed Ltd, noted, is designed to efficiently meet the vast demand for electric buses by leveraging private sector expertise and capital.
India’s broader electric bus market is witnessing robust growth, reflecting the government’s sustained policy push and increasing environmental awareness. Total registrations of electric buses in the country have surged from 1,988 units in 2022 to 4,408 units in 2025, indicating a strong upward trajectory. This growth is set against the backdrop of an estimated 150,000 public transport buses currently operated by government authorities nationwide, presenting an immense opportunity for fleet replacement and expansion with electric alternatives. Industry experts project a compounded annual growth rate (CAGR) for India’s electric bus market to exceed 30% in the coming decade, driven by supportive policies, declining battery costs, and increasing operational efficiencies of electric vehicles.
In anticipation of this escalating demand, manufacturers are aggressively ramping up their production capacities and investing in new facilities. Ashok Leyland, for instance, recently inaugurated a new greenfield facility for electric vehicle manufacturing near Lucknow, Uttar Pradesh, signalling its commitment to the electric mobility space. Eka Mobility, riding high on its recent tender successes, is on track to increase its manufacturing capacity to 6,000 electric buses by the end of the current financial year. Similarly, PMI Electro Mobility is constructing a new plant in Neemrana, Rajasthan, with an impressive annual capacity of 15,000 units. These investments are not just about meeting current demand but also about positioning India as a global hub for electric vehicle manufacturing, potentially attracting further foreign direct investment and fostering indigenous technological development.
Beyond the immediate economic impact on manufacturers and operators, the widespread adoption of electric buses carries profound implications for India’s sustainable development goals. Environmentally, the transition to electric fleets will significantly reduce urban air pollution, curbing emissions of particulate matter, nitrogen oxides, and carbon dioxide, leading to improved public health outcomes and a better quality of life for city dwellers. Economically, it contributes to energy security by reducing reliance on imported fossil fuels, bolstering the domestic manufacturing sector, and creating a green jobs ecosystem across the value chain, from R&D and manufacturing to charging infrastructure development and maintenance. Globally, India’s initiatives resonate with similar drives in other major economies; China, for instance, has successfully electrified a substantial portion of its urban bus fleets, while European and North American cities are progressively moving towards zero-emission public transport. India’s approach, characterized by large-scale aggregated tenders and innovative financing models like GCC, offers valuable lessons for other developing nations striving for green urban mobility.
However, challenges persist. Ensuring robust charging infrastructure, managing battery lifecycles, and maintaining consistent policy support are critical for sustained growth. The vast scale of India’s public transport needs requires not just procurement but also a holistic ecosystem of support services. Nevertheless, the government’s unwavering commitment, coupled with the competitive dynamism of its automotive industry, positions India at the forefront of a global electric bus revolution. The current 6,230-bus tender is more than just a procurement exercise; it is a critical milestone in India’s journey towards a cleaner, more sustainable, and economically vibrant future, driven by electric mobility.
