SML Mahindra to Launch First EV Bus in FY27, Sees Gradual Shift in CV Green Tech

SML Mahindra Ltd plans to launch its first electric bus in FY27, marking its entry into the segment even as the company remains cautious about the pace of broader industry adoption and the commercial viability of green mobility investments.

“So right now, our electric bus is under development, and in this financial year itself we will be launching that,” Vinod Sahay, Chairman - SML Mahindra & Mahindra Advanced Technologies and President - Aerospace, Trucks & Buses, said during an earnings call on Monday.

The launch will bring SML Mahindra into a segment that is still small but strategically important as commercial vehicle makers position themselves for cleaner mobility solutions. Sahay said the company would remain disciplined on capital allocation after the rollout. “Post that, we will evaluate every opportunity on the merit of its commercial viability and returns,” he said.

Sahay said the transition to greener commercial vehicles would not be defined by battery-electric technology alone, particularly in heavier segments. “When it comes to the CV industry, electric is not necessarily the only green technology we are talking about. Especially for heavy trucks, it is hydrogen and fuel cells which will also play a big role, and not just electric,” he said.

According to Sahay, electric vehicles are likely to have a clearer role in city buses and smaller commercial vehicles, while heavy trucks may eventually tilt more towards hydrogen fuel-cell technologies. For now, however, adoption remains limited in the bus market outside state-led procurement.

“What we are seeing as of now, barring buses which are linked to state transport undertaking purchases, is that we are not seeing any private sector player, whether it is for employee transport or school transport, buying electric buses,” Sahay said.

According to Sahay, the current size of the electric bus opportunity remains modest, held back by high acquisition costs, long payback periods, and gaps in charging infrastructure. “There are multiple challenges related to cost, the payback period, as well as charging infrastructure,” he said. He added that “currently, the industry share is less than one per cent of the segment which we are talking about.”

Even so, SML Mahindra believes it is technologically prepared to move quickly as the market develops. Sahay said the broader Mahindra group’s electric vehicle capabilities give it a strong foundation for the bus segment as well. “When it comes to electric buses, we are mastering the technology. You know, in Mahindra, we have very good capabilities for electric vehicles. We are well aware of the technology, and we can move very quickly,” he said.

But he also made it clear that any larger investment push would depend on clearer demand visibility. “When to put more capital to launch the product is a cautious call we will take based on the market evolution,” Sahay said.

That caution reflects the company’s current priorities in the conventional commercial vehicle business, where it sees significant room to grow from a relatively low base. Sahay said SML Mahindra’s immediate headroom in its core market remains far more compelling than chasing a still-nascent EV segment.

Still, SML Mahindra said it is building capabilities in powertrains so it can step up quickly once adoption reaches scale. “There are some things which we are working on, including on powertrains, which give us the capability that when the industry is ripe enough, we will be there,” Sahay said.