Govt plans 3,000 electric buses for Mumbai, Pune under PM E-Drive

Under the scheme, the government provides a subsidy of at least ₹25 lakh per e-bus, targeting 14,028 such zero-emission buses across nine cities with populations above 4 million: Delhi, Hyderabad, Bengaluru, Ahmedabad, Surat, Chennai, Kolkata, Mumbai, and Pune.

In the first tranche, the government said it would incentivise 10,900 buses of the 14,028 in five cities—Delhi, Hyderabad, Bengaluru, Ahmedabad, and Surat. The buses are to be procured by state transport agencies under the gross cost contract model through tenders issued by state-run Convergence Energy Services Ltd (CESL).

The tender for the first tranche of 10,900 e-buses was floated in June, though no contracts have been awarded yet. Submissions are due by 14 October, and a similar process is expected for the second tranche. The exact number of e-buses to be allocated to Mumbai and Pune has not been finalised.

If all 14,028 e-buses are not procured by the nine cities, the government plans to allocate remaining buses for intercity transport and tourist destinations, such as hilly regions.

E-Bus eligibility

With Maharashtra completing a direct debit mandate (DDM) with the Reserve Bank of India (RBI), Mumbai and Pune are set to be eligible for the second tranche of the PM E-Drive tender. A DDM, akin to a bank guarantee, ensures state transport agencies can meet costs for procuring, operating, and maintaining e-buses.

The DDM serves a dual purpose: enabling state transport agencies to access PM E-Drive subsidies and acting as the main mechanism under the ₹3,435-crore PM E-bus Sewa Payment Security Mechanism (PSM), which covers 38,000 new e-buses across India.

“Now, the government will take up planning for the second tender under the PM E-Drive scheme, and Mumbai and Pune will both be eligible for it,” one of the officials cited above said.

The other noted that earlier rounds of talks with state governments of West Bengal and Tamil Nadu had not yielded interest, leaving Maharashtra as the focus for this round.

Emailed queries to the union heavy industries ministry, the state governments of Maharashtra, West Bengal, and Tamil Nadu, and the RBI remained unanswered at the time of publishing.

The development comes as the government extended the PM E-Drive scheme by two years, following underutilization of funds for select vehicle categories such as trucks, buses, and ambulances.

Around 40% of the scheme’s outlay, ₹4,391 crore, was allocated for subsidising e-bus procurement, marking a shift from earlier initiatives like the FAME (Faster Adoption and Manufacturing of Electric and Hybrid Vehicles) schemes, which largely focused on electric two- and three-wheelers.

The PM E-Drive scheme, which succeeded a decade of FAME, emphasizes electrifying public transportation and also targets sunrise sectors such as e-trucks and e-ambulances. In August, NITI Aayog recommended that the government plan to saturate five cities with e-buses and make procurement easier for buyers.