India Electric Commercial Vehicle Market By Vehicle (Light Commercial Vehicle (LCV), Heavy Commercial Vehicle (HCV), Buses) By Propulsion (Battery Electric Vehicle (BEV), Plug in Hybrid Vehicle (PHEV)), Fuel Cell Electric Vehicle (FCEV)), By Battery (<50kwh, 50-150 kwh,>150kwh), By End Use (Logistics, Last mile Delivery), By Region, Competition, Opportunities & Forecast, 2021-2031F

Market Overview

India Electric Commercial Vehicle Market was valued at USD 6.11 billion in 2025 and is expected to reach USD 17.48 billion by 2031 with a CAGR of 19.16% during the forecast period. The India electric commercial vehicle market is witnessing transformative changes due to supportive government policies, technological innovations, and demand for cleaner transportation solutions. Urban freight and public transport operators are gradually adopting electric models to reduce operating costs and comply with emission regulations. Declining battery prices and advancements in vehicle performance are also reshaping buyer preferences toward electric commercial vehicles. Strong emphasis on sustainable mobility, especially in intra-city logistics and fleet services, is influencing vehicle replacement cycles. Manufacturing investments and localized supply chains are expected to enhance production scalability and product availability during the forecast period.

Electrification in the commercial vehicle space is reshaping logistics infrastructure and ownership models. The market is experiencing rising demand for electric light commercial vehicles used in last-mile delivery. Integration of smart telematics, vehicle-to-grid technology, and connected ecosystems is expanding the utility of electric fleets. High operational savings, compared to internal combustion vehicles, are encouraging logistics and delivery platforms to switch. Energy storage technologies and fast-charging capabilities are further driving operational feasibility. Although long-haul segments still require ecosystem upgrades, intra-city segments are expected to drive volume expansion.

Challenges such as underdeveloped charging infrastructure, high upfront costs, and limited payload capacity continue to pose obstacles. Uncertainty in battery lifespan and resale value also deters fleet operators in cost-sensitive markets. Grid reliability in rural or remote logistics zones affects the feasibility of EV adoption. Range anxiety and lack of specialized servicing networks hamper operational planning for certain commercial applications. Manufacturers must address product affordability and infrastructure gaps to accelerate nationwide EV adoption.

Market Drivers

Government Support and Incentives

The Indian electric commercial vehicle market is gaining momentum through proactive government policies like FAME II, which offer financial subsidies and benefits on vehicle registration and road tax. According to the Ministry of Heavy Industries (PIB, January 2025), under the FAME-II scheme, 1.59 lakh electric three-wheelers and 5,131 electric buses have been incentivized as of October 31, 2024. The scheme disbursed INR 6,577 crore in subsidies and sanctioned 10,985 public charging stations to support commercial EV deployment. State-specific incentives further enhance vehicle affordability, especially for fleet operators in public and goods transport segments. These initiatives are designed to reduce the cost disparity between ICE vehicles and EVs, helping catalyze adoption. In addition to subsidies, the government's focus on EV-friendly infrastructure development is building market confidence. Public procurement programs for electric buses and logistics vehicles add a significant demand layer and promote ecosystem readiness. Strategic partnerships between state authorities and industry stakeholders are also encouraging EV deployment in city transport and municipal operations.

Rising Fuel and Maintenance Costs

Fuel price volatility and increasing maintenance expenses for ICE vehicles are prompting commercial fleet owners to switch to electric alternatives. EVs have fewer mechanical components, resulting in reduced wear and tear, fewer oil changes, and lower service costs. For commercial vehicles that typically run for long hours and cover extensive distances, operating cost becomes a crucial factor in profitability. Electric models offer predictable cost structures and higher fuel efficiency in city traffic. The per-kilometer cost advantage becomes substantial in logistics, last-mile delivery, and public transportation. Businesses are recognizing the long-term savings and operational reliability of EVs, making them an economically sound investment.

Urban Emission Regulations

To combat rising pollution in cities, regulatory authorities are implementing low-emission zones and tightening emission standards. These regulations are forcing fleet operators to upgrade to cleaner alternatives. Electric commercial vehicles, being zero-emission, align with new regulatory frameworks and help businesses maintain compliance. According to NITI Aayog and Rocky Mountain Institute, electrification of commercial vehicle segments such as e-buses and e-LCVs can lead to cumulative fuel savings of 846 million tonnes and CO₂ savings of 1 gigatonne between 2020 and 2030, supporting India's broader energy transition. Public and private fleet owners operating in metro areas are under increasing pressure to transition their fleets. With more urban centers preparing air quality action plans, EVs are becoming a necessity rather than a choice. Electric commercial vehicles also offer advantages such as silent operation and eligibility for operation during restricted hours in sensitive zones.

Growth in Last-Mile and Urban Logistics

The rise of e-commerce, food delivery platforms, and quick commerce services is driving demand for agile, cost-effective, and environment-friendly last-mile delivery vehicles. Electric light commercial vehicles are ideal for intra-city transportation and deliveries due to their compact design, lower operating costs, and compliance with urban environmental norms. As per VAHAN Dashboard (Ministry of Road Transport & Highways), in FY 2024–25, electric three-wheeler registrations rose by 11% YoY to nearly 700,000 units, and they now make up over 57% of total three-wheeler registrations, showing their dominance in last-mile commercial mobility. Further, logistics firms are gradually replacing their diesel fleets with EVs to meet service-level agreements and emission targets. The demand for urban logistics is forecast to grow rapidly, and electric vehicles are positioned as the optimal mode for low-emission, high-frequency operations. This trend is expected to significantly boost demand across tier-1 and tier-2 cities.

Declining Battery and Component Costs

Advancements in lithium-ion battery technology, domestic battery pack manufacturing, and localization of powertrain components have led to a steady decline in the cost of electric commercial vehicles. 

• According to the International Energy Agency (IEA), EV battery pack prices fell 20% in 2024, marking the steepest drop since 2017. This reduction is primarily due to falling lithium and other critical mineral prices. For India's commercial EV segment, where cost is a major adoption barrier, such price drops enhance vehicle affordability.  
• The IEA notes that LFP (Lithium Iron Phosphate) batteries comprised 50% of global EV battery sales in 2024, and over 80% in China during late 2024. LFP's lower cost, safety, and now adequate energy performance make it ideal for last-mile cargo, electric buses, and light commercial vehicles in India.

As battery costs contribute a major share of EV pricing, this reduction is directly influencing vehicle affordability. Economies of scale, favorable raw material contracts, and government support for battery manufacturing are contributing to this trend. The lower cost of ownership, paired with financial schemes from banks and NBFCs, is easing the adoption barrier for fleet operators and logistics businesses that previously hesitated due to high capital investment.

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Key Market Challenges

Limited Charging Infrastructure

One of the key challenges in the India electric commercial vehicle market is the underdeveloped charging ecosystem. Most cities lack adequate charging stations suited to commercial vehicle fleets, especially high-capacity chargers for trucks and buses. This creates operational hurdles for long-haul transport or intensive urban use. Many commercial fleet owners are dependent on depot-based charging setups, which increase upfront infrastructure costs. Limited public fast-charging infrastructure restricts flexibility in routing and fleet scaling. The absence of standardized charging protocols and power availability constraints in remote areas further hinder network expansion and efficient utilization of electric commercial vehicles.

High Upfront Capital Investment

Electric commercial vehicles come with a higher initial cost compared to their internal combustion counterparts. Batteries, electric drivetrains, and imported components contribute to this pricing difference. For many logistics companies and transporters, especially small fleet operators, the upfront investment becomes a significant deterrent despite long-term operational savings. Limited availability of leasing models or tailored financing for EVs adds to the challenge. Even though battery prices are gradually decreasing, the financial viability remains sensitive to government incentives. Without adequate funding models or risk-sharing mechanisms, adoption among cost-sensitive segments is likely to remain slow.

Range and Payload Limitations

Battery electric commercial vehicles often face limitations related to range and payload capacity. For operations requiring long-distance travel or heavy load carriage, many EV models available in the market still fall short of conventional vehicle capabilities. Commercial operations that span across cities or involve transporting perishable goods with tight delivery windows may experience range anxiety and performance concerns. While advances in battery technology are improving specifications, payload capacity and endurance still restrict the application of EVs in certain use cases, especially in construction, inter-city logistics, and agriculture-based goods transportation.

Uncertainty in Resale Value and Battery Life

For commercial operators, asset value recovery through resale is an important financial consideration. However, the second-hand market for electric commercial vehicles is still evolving, and resale values remain uncertain due to rapid technology upgrades and battery performance degradation concerns. Fleet owners are also skeptical about battery life after the warranty period and the high replacement cost associated with it. These factors create doubts around total cost of ownership, especially for fleet buyers who plan long-term investments. Without established benchmarks for used EV valuation and battery health diagnostics, market participants remain cautious.

Key Market Trends

Telematics and Smart Fleet Integration

Fleet operators are increasingly integrating telematics, IoT sensors, and cloud-based software into electric commercial vehicles. These tools offer real-time tracking, predictive maintenance alerts, route optimization, and energy efficiency monitoring. Such digitalization enhances fleet visibility and helps reduce operational costs. In logistics and public transport, data analytics derived from connected EVs enable performance benchmarking and asset utilization improvements. These capabilities are especially valuable in urban environments where energy efficiency, uptime, and route planning play a critical role. The rising demand for fleet intelligence is pushing OEMs and fleet management platforms to embed telematics as standard.

Battery Swapping Adoption in Fleets

Battery swapping is gaining traction among commercial operators who require minimal downtime and consistent asset availability. This model decouples the battery from the vehicle, allowing rapid energy replenishment and eliminating range anxiety. It is particularly suited for electric light commercial vehicles and electric buses running on fixed intra-city routes. Pilot projects and partnerships are underway in urban centers, supporting swap stations at logistics hubs, warehouses, and public depots. As interoperability standards evolve and swap infrastructure scales, this trend is expected to reduce upfront battery costs and make commercial EVs more accessible.

Flexible Financing and Ownership Models

To address high initial costs, new financing models are emerging in the electric commercial vehicle market. Subscription-based ownership, lease-to-own programs, battery-as-a-service models, and per-kilometer usage billing are being introduced by financiers and mobility platforms. These models lower capital barriers and provide predictable operational expenses. Fleet owners can manage cash flow better and de-risk investment in new technology. Such flexible financing arrangements are proving effective for logistics startups, aggregators, and SME fleet operators. Banks, NBFCs, and fintech firms are collaborating with EV manufacturers to design sector-specific funding solutions.

Domestic Localization of EV Components

India’s push for self-reliance and reduced import dependency is leading to the development of localized EV component manufacturing. Indigenous production of motors, controllers, battery packs, and power electronics is improving supply chain resilience and reducing costs. Local R&D initiatives and joint ventures are bringing innovation to the domestic market, helping tailor electric commercial vehicles to Indian operational conditions. This trend also aligns with the government’s phased manufacturing program (PMP) and production-linked incentives (PLI) for EVs and components. As localization deepens, manufacturers gain flexibility in design and pricing, which benefits end users.

Integration with Renewable Energy and Energy Management

Electric commercial vehicle operators are increasingly exploring integration with renewable energy sources like solar power for depot and warehouse charging stations. Combined with energy storage systems, this reduces dependency on the grid and lowers electricity costs. Smart energy management tools help optimize charging schedules to benefit from off-peak tariffs and demand response programs. Renewable-linked EV charging is also appealing for sustainability-conscious organizations aiming for net-zero operations. This convergence of clean transport and clean energy is shaping future infrastructure development and will play a key role in scaling zero-emission logistics.

Segmental Insights

Propulsion Insights

The India electric commercial vehicle market is segmented by propulsion into Battery Electric Vehicles (BEV), Plug-in Hybrid Electric Vehicles (PHEV), and Fuel Cell Electric Vehicles (FCEV). Battery Electric Vehicles hold a substantial share, especially in light and medium-duty applications. They are preferred for short-haul transportation due to better energy efficiency and reduced operating costs. BEVs are powered solely by electric motors with on-board rechargeable batteries, making them suitable for last-mile delivery and city transportation where fixed routes and daily travel distances are predictable. Their lower maintenance costs and the increasing availability of charging points in urban clusters enhance adoption.

Plug-in Hybrid Electric Vehicles combine conventional internal combustion engines with electric propulsion. They are seen as a transitional technology for operators unwilling to rely completely on electric power. PHEVs offer flexibility for inter-city and longer commercial routes where charging infrastructure may be inadequate. These vehicles can operate in electric-only mode in regulated zones and switch to fuel-based operation for extended range, making them suitable for certain commercial fleets that operate across variable terrains or rural stretches.

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Region Insights

In 2024, the North region of India emerged as the dominant market for electric commercial vehicles. This growth is primarily driven by extensive deployment of electric buses and intra-city delivery vans in metropolitan areas with high pollution levels and dense populations. The presence of large-scale government procurement programs has led to increased adoption in public transport, particularly in state capitals and major tier-1 cities. Integration of EVs into municipal fleets and smart city initiatives has also supported volume growth.

North India's well-developed urban centers, such as Delhi, Chandigarh, and Lucknow, are supported by a relatively mature charging infrastructure, making them ideal zones for EV rollout. Local policies such as vehicle registration waivers, road tax exemptions, and green vehicle mandates for government fleets have accelerated commercial fleet conversions. High awareness levels among operators and better access to financing options have also contributed to higher penetration in the region.

Freight corridors and industrial zones in the region are seeing pilot deployments of electric light and medium commercial vehicles for short-haul logistics. Urban logistics players in North India have been proactive in electrifying fleets to meet sustainability targets and reduce per-kilometer delivery costs. Growth in organized retail, warehouse hubs, and hyperlocal delivery services is also fueling demand for electric LCVs.

The western region of India is emerging as a significant hub for electric commercial vehicle deployment, driven by state-level policy incentives, strong industrial activity, and expanding urban freight demand. Cities like Mumbai, Pune, Ahmedabad, and Surat are witnessing increased penetration of electric buses and delivery vans, particularly in municipal transport and logistics operations. State EV policies in Maharashtra and Gujarat provide capital subsidies, interest waivers, and scrappage incentives that are boosting fleet conversions across public and private sectors.

Recent Developments

• In March 2025, Jupiter Electric Mobility launched its first electric light commercial vehicle, the JEM Tez, targeting intra-city logistics and last-mile delivery. The vehicle offers a range of 127 km and a top speed of 50 km/h. It features fast-charging capability and is built with a 100% indigenized powertrain. The company plans to begin deliveries by Q3 FY26 and expand its EV portfolio in the commercial segment.
• In October 2024, Mahindra Last Mile Mobility launched the Mahindra Zor Grand (Zeo), a new four-wheeler small commercial electric vehicle. The Zeo offers two battery options with ranges of 120 km and 180 km, and supports fast charging. It is designed for last-mile logistics with a payload capacity of 800 kg. The vehicle will be manufactured at Mahindra’s Zahirabad facility and reflects the company’s focus on expanding its electric CV portfolio.
• In August 2024, Montra Electric, a subsidiary of Murugappa Group, is set to launch a range of electric small commercial vehicles (eSCVs) aimed at last-mile delivery and urban logistics. The new eSCVs will be produced at its Tiruvallur facility in Tamil Nadu. The company plans to offer multiple battery configurations to cater to diverse operational needs. Montra Electric is focusing on durability, performance, and lower total cost of ownership to compete in the evolving electric commercial vehicle segment.
• In September 2024, Hyundai Motor Company and Iveco unveiled a new all-electric commercial vehicle at IAA Transportation 2024, combining Hyundai’s fuel cell and EV tech with Iveco’s manufacturing and commercial expertise. The vehicle features a battery-electric drivetrain, targeting zero-emission urban and regional transport. It reflects both companies’ commitment to sustainable mobility and clean energy solutions. This collaboration builds on their strategic partnership to advance electric commercial vehicle innovation in Europe.

Key Market Players

• Ashok Leyland Ltd
• Eicher Motors Limited
• Infraprime Logistics Technologies Pvt Ltd
• JBM Motor Limited
• Mahindra & Mahindra Limited
• Olectra GreenTech
• Omega Seiki Mobility Limited
• PMI Electro Mobility
• Tata Motors Limited

Report Scope:

In this report, the India Electric Commercial Vehicle Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

•          India Electric Commercial Vehicle Market, By Vehicle:

o    Light Commercial Vehicle (LCV)

o    Heavy Commercial Vehicle (HCV)

o    Buses

•         India Electric Commercial Vehicle Market, By Battery:

o    <50kwh

o    50-150 kwh

o    >150kwh

•         India Electric Commercial Vehicle Market, By Propulsion:

o    Battery Electric Vehicle (BEV)

o    Plug in Hybrid Vehicle (PHEV)

o    Fuel Cell Electric Vehicle (FCEV)

•         India Electric Commercial Vehicle Market, By End Use:

o    Logistics

o    Last Mile Delivery

•         India Electric Commercial Vehicle Market, By Region:

o    North

o    East

o    West

o    South

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the India Electric Commercial Vehicle Market.

Available Customizations:

India Electric Commercial Vehicle Market report with the given market data, TechSci Research, offers customizations according to the company’s specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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