It was India's largest e-bus tender but Tata Motors, VE Commercial, Ashok Leyland missed it

Flush with recent investments, companies like PMI Electro Mobility and Eka Mobility offered aggressive, lucrative pricing, securing contracts for 5,210 and 3,485 e-buses, respectively.

Among other manufacturers, only Olectra Greentech—an established electric bus manufacturer and a subsidiary of Hyderabad-based EPC company Megha Engineering—managed a partial win, bagging 1,785 e-buses.

Bigger names such as Tata Motors and VE Commercial Vehicles (VECV) were caught off guard when the results, revealed on Wednesday, showed they had not won a single contract, according to three executives directly aware of the development. Chennai-based Ashok Leyland missed the tender entirely due to a technical glitch and has approached the Delhi High Court.

Government officials and industry executives spoke on the condition of anonymity as the results are so far only known to the bidders and haven’t been made public. Final letters of award to each player are expected to reach in the next few weeks.

Aggressive pricing drives new-age wins

PMI Electro and Eka Mobility, the two big winners, triumphed in a bidding process that saw prices lower than expected. A government official told Mint on the condition of anonymity that prices discovered varied for each city, and were lower by about 5-15% than previously estimated.

“There was aggressive competition where margins were as low as 20 paise in some instances. The new-age players emerged victorious as they found a better way to offer their e-buses at cheaper prices," the first executive cited earlier said. “In some cases, the price war was so aggressive that the difference between the first and second bidder was as high as 10%. Usually, we don’t see such high margins."

“A key differentiator for EKA is its deep vertical integration across the EV value chain through group entities such as Pinnacle Industries, VDL Pinnacle, and Instor India," a spokesperson for Eka Mobility said in response to Mint’s queries.

The spokesperson added that the company participated in the tender with balanced pricing, with a focus on profitability, execution certainty and long-term sustainability, and with partners that have a proven ability to finance and deploy electric buses and related infrastructure.

Ashok Leyland declined to comment on the matter. “As the matter is sub judice, we are unable to comment further until it is fully adjudicated by the court," a company spokesperson said.

Queries emailed to the other companies that participated in the tender remained unanswered till press time.

The business model

As per the tender conditions, winning bidders are required to supply e-buses across five cities—Bengaluru, Hyderabad, Delhi, Surat and Ahmedabad—and will be paid on a per-km basis over 10-12 years.

Here’s how it works. A company makes buses and provides them to the fleet operator. The operator runs the buses for the different cities and takes payments from their transport authorities. So, bus manufacturers do not have to operate the buses, while fleet operators get ready-made e-buses without having to invest in manufacturing.

Except PMI, all other manufacturers participated in the process through an electric bus fleet operator who can operate the buses in the cities. PMI Electro Mobility participated on its own without a fleet partner.

For instance, Eka Mobility participated in the contract via two fleet partners—Greencell Mobility and Chartered Speed. Olectra GreenTech participated through EVEY Trans Private Limited, a subsidiary of Olectra.

Execution challenge

Experts said the sheer size of the tender would mean there would be an impact on the business of companies that have not won orders, while pointing to severe challenges for winners in executing the contracts.

"This is a massive operation; it involves rolling out a large number of new buses where well-settled bus systems already exist," said T. Surya Kiran, former executive director of the Association of State Road Transport Utilities (ASRTU). “It will involve the upskilling of thousands of drivers, and creation of strict safety standards."

He added that depots and charging infrastructure for the e-buses will have to be set up to match the new fleets, and that it may be difficult to supply and operate these buses in the early years of the 12-year contract, but may get easier later on.

About the winners

PMI Electro Mobility, founded in 2017 by Satish Jain and Anurag Aggarwal, has a 3,000-unit annual capacity plant in Dharuhera, Haryana, and is building a second plant in Neemrana with a capacity of 15,000 buses. In FY24, revenue grew 2% to ₹590 crore, while profit after tax fell 13% to ₹21.56 crore, a Care Edge note dated 7 April showed. The company claims to have deployed over 1,500 buses in 31 cities.

Eka Mobility, a subsidiary of Pune-based automotive seat and interior maker Pinnacle Industries, was established in 2019 and entered the e-bus space seriously in 2022. The company is expanding to a 6,000-bus annual capacity by the end of this financial year and claims an order book of more than 3,000 buses in India and Africa. In FY25, revenue surged 341% to ₹234 crore, with losses widening to ₹74 crore from ₹32 crore in FY24.

Eka inked a strategic partnership with Japan’s Mitsui and The Netherlands’ VDL Groep in 2023, securing technology collaboration and joint investments of ₹830 crore. While Mitsui focused on bringing capital into the company, Eka is collaborating with VDL to bring the technical knowhow for making e-buses.

Why Legacy Players Lost

The first executive cited earlier suggested that the legacy players got unlucky in some instances where they lost out due to margins as low as 20 paise- ₹1. “But in many markets, there was aggressive pricing, which saw bid values fall too low and caught the legacy players off guard," the executive added.

The electric bus bid of Tata Motors Ltd, which led the market in the last two years, has stalled in 2025 owing to its concerns about previous tenders’ model, which required manufacturers to bear responsibility for the contracts. From leading the market by selling 1,462 e-buses in 2024, the company is set to end 2025 with just 213 e-bus deliveries, as per Vahan portal.

Tata sells two electric bus ranges, Starbus and Ultra. “We have consistently advocated for the inclusion of asset-light model (ALM) and payment security mechanism (PSM) as fundamentals for a financially viable and bankable business model," the company told Mint earlier. “We chose to follow a prudent business strategy and refrained from participating in certain tenders in the past due to the absence of these essential safeguards."

The company had conveyed to investors that it would participate in the CESL tender. Notably, Tata Motors’ miss comes ahead of completion of its merger with Italy-based Iveco, which has offerings in the electric bus space.

Similarly, VECV, a joint venture of Eicher Motors and Sweden-based Volvo Group, missed out on the opportunity. It had participated in the tender through Greencell Mobility. The company offers its electric bus offering, Skyline, in the Indian market.

Ashok Leyland’s Switch Mobility is in the business of selling electric buses in the country and overseas, with the Chennai-based manufacturer also having Ohm Mobility, a fleet management services provider.