India electric bus market grows amid infrastructure and financing challenges

India is experiencing a significant rise in electric bus adoption, with sales reaching 5,412 units in FY26, a 35% year-on-year increase. While the market is among the fastest-growing globally, electric penetration in the medium and heavy passenger vehicle segment remains low at approximately 7.2%.

Growth is currently driven primarily by government tenders and state transport undertakings (STUs), which operate the vast majority of the nation's electric buses. Private fleet operators have seen negligible adoption, accounting for only about 4-6% of the market. Challenges to broader adoption include inadequate charging infrastructure outside state-run depots and financing models that are currently better suited for diesel vehicles than electric ones.

In Delhi, the government is accelerating its transition by preparing to roll out 150 new electric buses next month. The city currently operates around 5,088 electric buses across 40 depots. Ongoing infrastructure projects under the National Electric Bus Programme and the PM E-Drive scheme aim to significantly expand charging capacity across dozens of new and existing depots over the next two years.