Electric Buses Expected to Capture Up to 40% of India’s Bus Market by FY35: Report

New Delhi — Electric buses are set to play a much larger role in India’s transport system over the next decade, with their share in annual bus sales projected to rise from the current 7 per cent to nearly 35–40 per cent by FY35, according to a new report by KPMG.

The report noted that electric vehicle adoption in public transport could cross 85 per cent during the same period, driven by government initiatives, infrastructure expansion and improving economics of EV operations.

India’s bus market, which has traditionally remained in the range of 35,000–50,000 units annually, is now witnessing a major transformation as electrification gathers pace. With buses accounting for nearly 57 per cent of passenger travel in the country, the shift towards electric mobility is expected to significantly support India’s clean energy and decarbonisation goals.

According to Rohan Rao, Partner and Lead for Electric Mobility at KPMG India, the country’s electric bus transition has moved beyond being just a policy-driven push and is becoming a long-term structural opportunity for the mobility sector.

He said the momentum has been fuelled by government procurement programmes, falling operational costs and growing investments in charging infrastructure. Going forward, the focus is expected to shift towards creating a scalable ecosystem involving domestic manufacturing, innovative financing models, charging networks and operational efficiency.

The report highlighted that rapid urbanisation, rising demand for mobility and sustainability commitments are accelerating the transformation of India’s bus industry. Both public and private transport networks are increasingly adopting EV-based operating models.

Raghavan Viswanathan, Partner at KPMG India, said the next phase of growth in the e-bus segment is likely to come from private intercity travel, airport transportation, corporate fleets and app-based mobility services, even as public transport undertakings continue to dominate adoption.

The study also pointed out that electric buses can offer up to 70 per cent higher energy efficiency and considerably lower lifetime emissions compared to diesel-powered buses.

Under the government’s PM-eBus Sewa programme, tenders for around 6,600 electric buses could potentially help save 1–2 million tonnes of carbon dioxide emissions and reduce oil imports by an estimated $2–3 billion over the concession period.

The report said nearly 62,000 electric bus tenders have been floated across India so far, with about 46,000 buses already awarded under different government schemes. As of March 2026, nearly 16,300 electric buses were operational on Indian roads, reflecting strong progress despite ongoing implementation challenges.

More than 90 per cent of current e-bus deployments in the country have been driven by government tenders and public transport agencies. India is also expected to issue tenders for another 40,000 electric buses by FY30 through central and state-backed programmes, the report added.

With inputs from IANS