New Delhi: India is looking to accelerate its government fleet electrification programme via its clean energy agency to central ministries, state governments, public sector banks, and autonomous bodies—widening a drive that has so far hardly made a dent in a vehicle fleet of over 800,000 units.
Led by the Convergence Energy Services Ltd (CESL), a central clean energy agency, the expansion plan will offer state governments and public sector undertakings (PSUs) a leasing-based 'EV as a Service' model that eliminates purchase costs and provides charging infrastructure and maintenance. The model, launched in 2024, will help circumvent the two big barriers to fleet electrification: high capital outlay and logistical complexity.
“CESL is also reaching out to public sector banks, central/state governments, PSUs, autonomous bodies, etc., to align with the government’s larger vision of reducing fossil fuel dependence, lowering operational fuel costs and accelerating clean mobility adoption across public institutions,” a CESL spokesperson told Mint.
The move comes after Prime Minister Narendra Modi called for increased use of electric vehicles (EVs), and as the finance ministry directed all public sector banks, insurance companies and financial institutions to switch to EVs as part of an austerity programme. For carmakers like Tata Motors and Mahindra & Mahindra, the plan is an opportunity at a time when EV penetration in the passenger car segment has just crossed 5%.
- CESL is expanding EV leasing to states, PSUs and autonomous bodies.
- The government fleet of 800,000-plus vehicles is less than 1% electric.
- Leasing model bundles vehicles, charging, and maintenance to cut transition barriers.
- Tata Motors and Mahindra among firms that could benefit most.
- Past electrification efforts failed; this push needs measurable targets to succeed.
But the optimism should be tinged with caution. A 2022 Lok Sabha disclosure showed that of 847,544 government vehicles, just 5,384 were electric—just 0.63%. The Union government fleets recorded an EV share of 0.58%, while state government fleets were even lower at 0.31%. Whether CESL's latest plan translates into orders is the big question.
“The model offers end-to-end fleet management solutions, including vehicle deployment, maintenance, insurance and charging support, thereby reducing operational complexity for departments transitioning to electric mobility,” the CESL spokesperson said.
Long-standing problem
The agency's efforts come at a time when Prime Minister Modi has called for promoting electric vehicles across the country, with various ministries stepping in to take forward the initiative.
Request for comments from Hyundai, Maruti Suzuki, Mahindra and Mahindra, and VinFast, among others, remained unanswered.
“The government’s continued push to electrify its fleet underscores the strategic importance of EVs in strengthening India’s energy security by reducing dependence on imported fossil fuels. With a sizeable government-linked fleet, this transition presents a meaningful opportunity to accelerate EV adoption at scale," a Tata Motors Passenger Vehicle spokesperson said in response to Mint queries.
“The recent emphasis by the central and multiple state governments on EVs is creating strong tailwinds for the segment, encouraging new car buyers to consider EVs for their next purchase. With the country’s renewed stance towards EVs, we expect demand to be bullish, with 4W EVs penetration exceeding 8% by the end of CY 2026," a JSW MG Motor India Spokesperson said.
Mint reported on 18 May that the finance ministry has directed all public sector banks, insurance companies, and financial institutions to implement austerity measures, which include switching to electric vehicles.
Electrifying government fleets can be low-hanging fruit, given a set pattern of office travel and available charging infrastructure, experts said.
“It also sends a strong message of EV adoption if policymakers are willing to travel in such vehicles,” Amit Bhatt, India managing director at International Council on Clean Transportation, said.
The current push for adoption of electric mobility in government fleets is not the agency’s first such initiative, said Shyamasis Das, research fellow at the Center for Social and Economic Progress (CSEP). “They did it about a decade ago, too. Government fleets can be a big market for EV makers also,” he said
While there have been efforts before, past data on electric vehicle adoption by government agencies has shown limited success.
Das said cars used by the government employees to transport between offices often run more than private cars. “In these cases, parking time can be utilized for charging the EVs during the day to absorb a high share of non-fossil solar energy in the grid or directly from solar panels on parking bays,” he said.
Reducing imports, improving air quality
Mint reported on 17 May that electricity prices on Indian power exchanges plummeted in multiple trading sessions during the day. This sharp fall highlighted a growing challenge for India’s power sector: managing rising solar generation in the absence of adequate storage capacity and daytime power demand.
Das added that while increasing EV adoption during the West Asia war would help achieve the crucial objective of reducing crude oil imports, it would also address the urban air quality challenge and long-term climate action goals, as these vehicles have zero tailpipe emissions.
For electric vehicle makers, there has been an uptick in EV penetration across segments since the start of the war. There are already signs of an uptick, with two-wheeler EV penetration at 9.6% in March and 7.8% in April compared to 6.5% in February when the war broke out. In cars, penetration rose to 5.1% in March and 5.7% in April, up from 3.4% in February.