DVA certification impacts e-bus volumes in FY25; surge expected in FY26

Mahesh Babu, CEO of Switch Mobility

The electric bus (e-bus) segment has witnessed a marginal dip in volumes in FY25, falling short of the optimistic growth forecasts made at the start of the fiscal. Despite strong momentum in the first half and a robust order pipeline, the sector was unable to sustain its projected trajectory—largely due to regulatory and certification-related delays.

Electric bus volumes for 2024–25 declined by around 4 per cent at about 3,570 units, according to JMK Research, quoting data from Vahan and the Telangana Dashboard.

Industry stakeholders had anticipated a year of substantial expansion. However, delivery schedules were disrupted by unexpected delays in obtaining Domestic Value Addition (DVA) certification—a requirement under recent government tenders.

Convergence Energy Services Ltd (CESL) floated tenders, including one for 5,000 buses. However a lack of clarity around the DVA certification process hindered deployment.

Certification delay

When the tender was released, it included a mandate for DVA certification. Although a reference table was provided, there was no clear guidance on how to complete the certification. This ambiguity led to prolonged back-and-forth between agencies, including the Ministry of Heavy Industries (MHI), the Department of Heavy Industry (DHI), and CESL

“By the time the final guidelines were issued, testing agencies indicated that the certification process would take approximately four to five months—a timeline that had not been accounted for in the original tender schedule. This has become the central issue behind the delays,” Mahesh Babu, CEO of Switch Mobility, the EV arm of Ashok Leyland, told businessline.

While OEMs are ready to comply, the extended certification period has forced several scheduled FY25 deliveries to shift into FY26. Despite this short-term disruption, the industry expects a strong rebound in this fiscal.

“Had it not been for the DVA certification issues, we would’ve delivered significantly more. We’re expecting to more than double our volumes in FY26. The pipeline is strong, and once the certification hurdle is cleared, we’re geared up to scale quickly,” he added.

Switch has achieved a monthly run rate of over 100 e-bus deliveries in Q4 of FY25, a pace it aims to maintain or surpass in FY26. “There are no capacity constraints. It’s purely a matter of certification and regulatory clarity,” he added.

Industry-wide volumes are expected to follow a similar upward trajectory in the fiscal years ahead. However, the impact of new tenders will be more evident from FY27 onwards, given the typical one-year delivery lead times.

According to CareEdge Ratings, five companies account for over 85 per cent of the e-bus market share, with a combined annual production capacity of around 40,500 units.

Published on April 7, 2025