MHI Looking to Make E-Bus Financing Easier, Cheaper: Hanif Qureshi

The Ministry of Heavy Industries (MHI) is working to extend India’s electric bus push to the private sector and make financing cheaper, as the government turns its attention to buses and trucks for the next phase of vehicle electrification.

The ministry is looking at ways to address lenders’ concerns over financing electric buses, particularly as existing government-backed programmes have largely focused on public transport, Hanif Qureshi, Additional Secretary at MHI, said at the India Clean Transportation Summit 2026 in New Delhi on Tuesday.

Banks currently perceive financing in the segment as relatively high risk, making the cost and availability of capital a hurdle for operators, Qureshi said. MHI is therefore examining ways to make financing easier and cheaper.

Over the next five years, Qureshi estimated that around 50,000-60,000 buses could be added to the segment, he indicated.

Qureshi had earlier outlined some of the financing measures being considered by the ministry. In May, he said MHI was examining interest subvention and partial credit guarantees for electric buses and trucks. Such measures could reduce the risk borne by lenders.

The issue is particularly important for commercial vehicles, where ownership is fragmented. Qureshi had said in May that many operators own fewer than five trucks or around 10 buses, making banks more cautious about lending to them.

Public e-bus Programme Gathers Scale

The proposed private-sector push would add another leg to the government’s existing e-bus programmes.

Under PM E-DRIVE, the government has allocated ₹4,391 crore to support 14,028 electric buses, of which 14,000 had been allocated as of August, according to MHI data. Separately, the PM e-Bus Sewa-Payment Security Mechanism is designed to support more than 38,000 electric buses by protecting operators against payment defaults by public transport authorities.

As of July, the payment-security scheme covered 27,555 buses. This included 10,000 buses under the PM-eBus Sewa programme, 14,000 under the PM E-DRIVE programme and another 3,555 buses under state government and state transport undertaking initiatives.

The bulk of these programmes, however, is linked to public transport. Qureshi said the ministry now wants to explore how electric buses can penetrate private fleets as well.

Trucks Next Big Challenge

Electrification is considerably more difficult in heavy trucks.

Qureshi estimated that electric trucks currently account for less than 0.1% of the segment. At the other end of the market, he said about 42% of three-wheelers sold are already electric, underlining the sharp difference in EV adoption across vehicle categories.

Heavy trucks are also important from an emissions perspective. Diesel trucks make up only around 3% of India’s vehicle population but account for about 42% of transport-related greenhouse gas emissions, according to MHI.

The government introduced its first direct incentive programme for electric trucks under PM E-DRIVE in July 2025. The ₹500-crore programme is expected to support around 5,600 e-trucks, with incentives of up to ₹9.6 lakh per vehicle. Ports, steel, cement and logistics were identified as key potential users.

Qureshi said some applications could be considerably easier to electrify than nationwide long-haul trucking. Trucks operating around ports, for instance, have more predictable routes and operating patterns, making charging easier to plan.

EV Charging Corridors: MHI Targets High-Density Freight and Bus Routes

Charging infrastructure is also being targeted at routes with heavy commercial vehicle movement.

Qureshi said MHI has identified three corridors with some of the highest truck movement and is focusing on ensuring adequate charging availability on these routes. The objective is to ensure that truck operators do not face charging constraints as electric heavy vehicles enter service.

The initiative is part of a wider freight-charging strategy. Qureshi had said in May that MHI had identified 24 high-density freight corridors and 50 bus corridors for charger deployment.

PM E-DRIVE has earmarked ₹2,000 crore for EV public charging infrastructure across the country. India had 67,657 installed EV chargers as of August, including 1,139 battery-swapping station chargers.

Qureshi said the government is supporting the deployment of fast chargers and is also examining the grid requirements needed to supply them. He added that funds have been provided to states, several of which are inviting charge-point operators to establish charging stations.

India's Oil Import Bill Strengthens the Case for EV Transition

Beyond emissions, Qureshi positioned electrification as an economic and energy-security issue.

India imports more than 85% of the crude oil it consumes, making the transport system vulnerable to movements in international oil prices and geopolitical disruptions, he said. The recent turmoil in the Middle East only strengthens the case for shifting more transport demand away from petroleum, according to Qureshi.

Official Petroleum Planning and Analysis Cell data put India’s crude oil import dependence at 87.8% in FY25. The petroleum ministry has also said India meets around 88% of its crude requirement through imports.

Qureshi said the economics of EVs already work in many use cases even if their upfront purchase costs remain higher. Financing and infrastructure therefore become critical in closing the initial cost gap and enabling operators to make the switch.

That argument is also supported by a new ICCT working paper on India’s EV transition. The study estimates that even if India manufactured no battery cells domestically, its combined oil and battery import bill in 2050 could be 39% lower under its Momentum electrification scenario and 61% lower under its Ambitious scenario than under the Baseline case. ICCT said this was because the value of avoided oil imports outweighed battery imports by an order of magnitude.

Local Manufacturing Gathers Pace

Qureshi also pointed to the government’s efforts to build domestic manufacturing capacity for clean-vehicle technologies, covering EVs as well as components that can find applications across electric, hydrogen and advanced vehicle systems.

MHI’s ₹25,938-crore PLI scheme for automobiles and auto components requires at least 50% domestic value addition for eligible advanced automotive technology products. As of July 28, 18 applicants had received domestic value-addition certificates for 155 products and variants, according to the ministry.

Approved applicants under the PLI-Auto programme had reported cumulative investments of ₹44,326 crore and incremental sales of ₹52,414 crore through March 2026, while incentives worth ₹2,386 crore had been disbursed.

For MHI, the next challenge is increasingly shifting from demonstrating that electrification can work to making it viable in segments with higher capital requirements and more complex operating patterns. Qureshi’s remarks suggest that private buses, heavy trucks, targeted charging corridors and lower-cost financing are set to become important parts of that push.