Indian cities have moved beyond pilot projects and are now adopting electric buses at scale, marking one of the world’s most ambitious mobility transitions. Over the last ten years, e-buses have been introduced as cleaner, quieter, and more cost-effective alternatives for millions of commuters.
The consolidation of demand, service-based contracts, and expansion of charging infrastructure have been enabled by national programmes such as Faster Adoption and Manufacturing of Hybrid and Electric Vehicles-II (FAME-II) and PM-eBus Sewa.
From Policy Signals to Buses on the Road
A crucial factor in scaling e-bus adoption has been the shift toward service-based contracts. Under the FAME-II programme, supported by ₹10,000 crore, incentives for 7,000 e-buses were tied to this contract model.
Instead of one-time bus purchases, state transport undertakings (STUs) now pay operators per kilometre, making operations financially viable and comparable to fossil fuel-based systems.
This model allows manufacturers and operators to deliver full-service solutions—including charging infrastructure and after-sales support—while reducing the responsibilities of transport authorities.
The PM-eBus Sewa scheme further expands this model by targeting 10,000 e-buses under public-private partnership (PPP) arrangements in tier-2 and tier-3 cities, widening access to clean transport beyond major metros.
E-Bus TCO Advantage
One of the biggest breakthroughs came with the Grand Challenge tender of 2021, organized by Convergence Energy Services Limited (CESL). By combining demand from multiple cities, the tender secured record-low service prices—₹43.49/km for 12-metre buses and ₹39.21/km for 9-metre buses, including electricity. These prices are at or near diesel costs, proving that electric mobility can compete directly with traditional fuels.
Most importantly, this shifted the mindset from CAPEX to OPEX, allowing operators to realise the true Total Cost of Ownership (TCO) advantage of EVs over fossil fuels. From clear policy signals to buses now running on the road, this initiative catalyzed the adoption of electric mobility, demonstrating that EVs are not only sustainable but also economically viable.
A CESL and World Resources Institute (WRI) India study also revealed that operating costs could be up to 31% lower than diesel and 18% lower than CNG, even without subsidies. This indicates that locally manufactured e-buses can scale competitively, providing a long-term pathway for sustainable mobility.
Climate and Air-Quality Gains
The environmental benefits of electric buses are already tangible. Studies by the International Council on Clean Transportation (ICCT) show that Indian electric buses are approximately 70% more energy-efficient than diesel counterparts and reduce greenhouse gas emissions by nearly 19%, even when operating on a coal-heavy grid until 2035.
The immediate impact is improved urban air quality. With no tailpipe emissions, e-buses eliminate nitrogen oxides (NOx) and particulate matter from heavily trafficked streets, reducing public exposure to harmful pollutants. This is a critical step towards healthier, more livable cities.
Scaling Beyond Megacities
The transition is no longer limited to metros. Delhi, Mumbai, Bengaluru, Kolkata, and Chandigarh already have hundreds of e-buses in service. Smaller towns have also begun procurement under FAME-II and PM-eBus Sewa.
According to VAHAN data, 3,616 e-buses were registered in 2024, and growth has continued into 2025 as tenders turn into deliveries. This marks not an experiment but a structural change in how buses are acquired and operated. Domestic manufacturing and Make in India policies are also supporting this expansion, strengthening local supply chains and ensuring more cost-effective adoption across diverse geographies.
Challenges and Solutions
Despite progress, challenges remain. Upfront procurement costs for electric buses can be 1.6–1.8 times higher than for diesel vehicles, underscoring the importance of aggregated demand and OPEX-based contracts.
This is where the TCO advantage becomes evident: while upfront costs are higher, lower operating costs—fuel, maintenance, and energy efficiency—make electric buses more economical over their lifecycle, ensuring they are financially competitive with diesel alternatives.
Access to land and high-capacity electricity connections—often exceeding 4 MW for large depots—remains another bottleneck, particularly in dense urban areas. Effective route planning, charging windows, and block scheduling are also essential to ensure reliable service.
The national government is addressing these concerns by offering clear frameworks for depot-based versus opportunity charging and supporting cities in building robust operational systems.
The Road Ahead
India’s next leap in e-mobility will be scaling from 10,000 to several tens of thousands of e-buses while ensuring affordability and service reliability. Achieving this will require:
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Incremental fleet purchases
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Stronger cooperation between utilities and transport authorities
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Smart charging and digital optimisation tools
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Workforce training for high-voltage safety and operations
E-buses are rapidly becoming the backbone of public transport in India. With costs approaching parity, clear climate benefits, and broad policy support, electric mobility is no longer a future aspiration—it is actively reshaping Indian cities today.
Rohit Srivastava is the Chief Growth Officer at EKA Mobility. Views expressed are the author’s personal.