Electric buses have become more important than ever. Why?

India may soon roll out incentives worth over $1 billion to push private transport operators towards electric buses and trucks.

The why: the government wants to reduce India’s dependence on fossil fuels, especially in commercial transport, which consumes massive amounts of diesel every day.

According to Bloomberg, the proposed programme could run for 10 years and focus mainly on privately owned buses and trucks.

Stock action: stocks like JBM Auto, Ashok Leyland, Olectra Greentech shares were in the green on the back of this news.

And that’s important because private operators dominate the sector.

The challenge: India has more than 2 million buses on the road, but government-run transport operators control only around 5% of them. Nearly all trucks in the country are privately owned too.

Electric buses are seeing some momentum, largely driven by state transport corporations. But diesel buses still dominate the roads, and long-haul electric trucks have barely taken off.

The bigger challenge is the scale of India’s target. Electric vehicles made up only around 7.6% of total vehicle sales in 2024, far below the government’s target of 30% by 2030.

That means India took almost a decade to reach 7.6% EV penetration and now has to accelerate much faster over the next five years.

The progress: electric buses accounted for 4.5% of total bus sales in FY26 till mid-February, up from 3.5% in FY25, according to Vahan data.