In a dramatic twist that surprised many in the Indian automotive world, two of the country’s most iconic commercial vehicle makers — Tata Motors and Ashok Leyland — have ended up without a single contract in India’s largest electric bus tender under the PM E-DRIVE scheme. What was expected to be a defining moment for legacy manufacturers in the electric mobility transition has instead turned into an unexpected setback.
The Biggest E-Bus Tender in India’s History
The ambitious tender, led by Convergence Energy Services Ltd. (CESL), aimed to procure a whopping 10,900 electric buses to be deployed across five major urban centres — Bengaluru, Delhi, Hyderabad, Surat, and Ahmedabad. These buses are part of the government’s push to electrify public transport, reduce pollution, and usher in a cleaner, greener future for urban commuters.
Under this model, winning bidders will not only supply the buses but also operate and maintain them over a long-term period, receiving payment on a per-kilometre basis. This gross cost contracting approach is designed to keep operations affordable and sustainable for city transport agencies.
New-Age Players Steal the Spotlight
Instead of legacy giants grabbing the opportunity, new-age electric bus manufacturers surged ahead with highly competitive bids. Companies like PMI Electro Mobility and EKA Mobility offered aggressive pricing and operational plans that resonated with the evaluators, leading to them winning the bulk of the buses on offer. Established specialist manufacturer Olectra Greentech also earned a significant share.
According to reports, PMI Electro secured more than 5,200 buses on its own, while EKA Mobility landed over 3,400, and Olectra Greentech claimed nearly 1,800 buses. This shift underscores how nimble, well-capitalised electric vehicle startups are rapidly reshaping India’s clean transport landscape.
What Went Wrong for Tata and Ashok Leyland?
While Tata Motors and Ashok Leyland are household names in the commercial vehicle sector with decades of experience and loyal customer bases, several factors worked against them this time.
In Tata’s case, sources suggest that its bid pricing may have been too high compared with rivals, leaving it outpaced in a tightly contested tender where even a few paise per kilometre could make the difference. There were also strategic decisions about how to participate under the gross cost model that may not have played to Tata’s strengths.
Meanwhile, Ashok Leyland’s subsidiary OHM Global Mobility did not successfully submit its bid due to what the company described as technical difficulties with the CESL portal. Ashok Leyland has since moved the matter to the Delhi High Court, challenging the outcome and seeking clarification on whether its submission was wrongly rejected.
Other established players such as VE Commercial Vehicles (a joint venture between Eicher Motors and Volvo Group) also found themselves without contracts, a sign that legacy manufacturers may need to rethink how they compete in high-stakes electric mobility deals.
A Broader Shift in India’s EV Ecosystem
This surprising outcome highlights a changing reality in India’s transportation industry. Electric bus manufacturing and operations are no longer dominated by traditional players alone. Rather, younger, specialised companies with flexible cost structures, strong financing, and innovative business models are rising quickly — and winning big.
It also reflects how aggressively pricing strategies and execution planning have become crucial. With margins tightening and competition fierce, even big names can be caught off-guard if they misjudge market dynamics.
What’s Next for Urban Mobility?
With CESL now finalising financial bids and city transport authorities preparing to sign deals with winning operators, the rollout of these nearly 11,000 electric buses is expected to accelerate next year. The investment in cleaner transport could transform daily commuting in India’s major cities, cutting pollution and bringing more reliable services to millions.
For Tata Motors and Ashok Leyland, this tender outcome may prompt internal strategy reviews, and the upcoming Maharashtra and other regional e-bus tenders could offer fresh opportunities to regain their footing.
Disclaimer: This article is based on current reporting and information available as of December 2025. It is intended for informational purposes only and does not constitute professional advice or endorsement of any company or strategy.
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