Investors’ rush to back electric commercial vehicle players has led to commitments worth $530 million in the last six months, backing new-age players at a time when the government’s policy focus is shifting towards electrifying trucks and buses.
Hero-backed Euler Motors became the latest to join the wave on Tuesday as it secured funding of $47 million from Lightrock, Hero MotoCorp and Blume Ventures, with additional debt funding of $27 million from BlackSoil, Trifecta, InnoVen and Alteria Capital.
The latest funding round for the New Delhi-based electric light commercial vehicle maker brought the cumulative total of funding from investors for electric CV makers to $530 million since October, led by PMI Mobility, which secured a $310 million investment commitment from KKR.
“The light commercial vehicle as a segment has continued to grow, because it makes fundamental sense,” Saurav Kumar, founder and chief executive at Euler Motors, told Mint. The superior long-term operational savings of electric commercial vehicles have made the sector’s funding growth outpace all other transport categories, he added.
Other fundraisers during this period include electric fleet operator Greencell Mobility’s $89 million, and electric bus and truck maker Eka Mobility’s $57 million fundraise. In the first nine months of 2025, an equivalent funding number stood at close to $150 million, suggesting that the sector is seeing a pick-up in fund infusions.
Queries sent to PMI and Eka Mobility remained unanswered.
Additionally, the government has proposed tightening fuel-efficiency norms for LCVs, which is expected to increase the penetration of such vehicles once it comes into effect, along with incentivising electric buses and electric medium and heavy trucks through the ₹10,900 crore PM E-Drive scheme.
Policy tailwinds and infrastructure returns
Taken together, the developments are fueling the growth of electric commercial vehicles in India, which saw sales jump 54% in 2025 to 15,606 units, largely comprising electric LCVs and buses, according to data from Federation of Automobile Dealerships Associations (Fada). However, their share in overall commercial vehicle sales was only 1.5%, the lowest among all categories.
Devndra Chawla, chief executive officer and managing director at GreenCell Mobility, said that the sector has reached a strong balance between policy support and commercial viability, which is driving investor confidence.
“Payment security mechanisms have been a game-changer, addressing cash flow risks in public transport projects,” he said, adding that government support and pooled demand have made earnings more predictable and the business more profitable.
Shilpa Kumar, managing director and head of India at British International Investment (BII), said sentiment is strengthening in the sector as electric CVs are now scaling rapidly.
“What is driving investor interest today is a combination of improving unit economics, strong policy direction, and the emergence of more integrated, platform-led business models,” she said. Strategic investors are looking beyond individual firms to fund entire ecosystems, spanning vehicle production, financing, battery tech, and charging networks, she added.
Significant momentum in the commercial vehicle sector is being driven by electric bus tenders issued by the government under the PM E-Drive scheme. In December, the country closed the largest eBus tender, for 10,900 buses, followed by another tender for over 6,000 buses, which is currently in progress.
In the 10,900 bus tender, PMI and Eka were among the largest winners, accounting for more than three-fourths of the contracts.
“Government schemes like PM eBus Sewa and PM E-Drive have together committed to deploying tens of thousands of electric buses by the end of this decade, and state transport authorities across the country are actively tendering at scale. This pipeline is what is driving large capital deployment,” Koushik Bhattacharyya, managing director and head, Industrials Investment Banking at Avendus Capital, said.
“These are infrastructure plays with long-tenure government contracts, sovereign-backed payment security, and highly visible cash flows. The right analogy is a toll road or a power purchase agreement, not a startup funding round,” he added.
The investments in new-age electric CV makers have followed the lead of legacy commercial vehicle companies like Tata Motors Ltd and Ashok Leyland Ltd, which have also increased their investments in the sector.
Expanding models, plants
Tata Motors showcased its expanded electric truck range in January, just a week after Ashok Leyland inaugurated a dedicated electric commercial vehicle plant in Lucknow, which can make up to 5,000 electric vehicles annually.
In an interview with Mint, Eka Mobility’s founder and chairman, Sudhir Mehta, said that electric commercial vehicles have tailwinds to grow in the country.
Increasing competition in the sector is good. It will help in expanding the segment and also meet the growing demand,” Mehta said earlier. “The buses of public transport are going to be electrified, but what is also an interesting opportunity for us is the rise of electric intercity buses.”