ESG performance or compliance are fast becoming a priority for most corporates. Looking beyond their ambitious targets about achieving carbon neutrality by 2045 while the country may have set a carbon neutrality for a later date, ESG is driving carbon footprint reduction and a quest for sustainable future. As early followers of ESG processes rake in carbon credits, it is companies like Tesla that made billions of dollars from selling carbon credits than electric autonomous cars. 
Carbon credits are a key part of financial performance and has helped it to achieve carbon credits, It is the same with BYD of China. Raking in carbon credits as a manufacturer of electric vehicles, BYD, aided by the Chinese Government’s ‘Made in China 2025’ initiative, is finding itself in a position of advantage as it eyes the European market for expansion. 
BYD could soon sell more than 300,000 vehicles in Europe alone with its factory in Hungary scheduled to begin operation in 2026. The capacity at the plant would be gradually expanded to 300,000 vehicles per year against the background of the company selling 16,000 vehicles across Europe in 2022. 
But that is not all: With a clear edge in electric vehicles as compared to Europe, US or the rest of Asia, which has been sold in developing electric vehicle technology, Chinese automakers like BYD have begun to eye plants of European manufacturers like Volkswagen as they falter and cut the flab. 
As Volkswagen is forced to sell its facilities in Dresden and Osnabrück, work that has been lost is going the way of Chinese car companies. Scrambling to meet the EU’s strict 2025 emissions targets, European manufacturers are buying carbon credits from Chinese electric vehicle manufacturers like BYD, which have accumulated a lot of them. 
With Europe planning to fine Volkswagen Eur 1.5 billion for falling short of emissions compliance, it is a not time away that Chinese electric vehicle manufacturers look poised to not only dominate the European market but also build their vehicles in the heart of Europe in big numbers rather than export them from their home country.
Having developed the habit of keeping technology and innovation to themselves and in their home country, the Chinese automotive players are playing smart with their electric vehicle card. They are triumphing on the basis that they are too good at making electric vehicles much like they are not so good at making ICE vehicles. They lack the knowledge of metallurgy that is needed to build internal combustion engines, mentioned an electro-mechanical engineer in Germany. It feels like a punch to the gut, added another engineer from Europe as he explained how the US and European flocked to China to save costs and are being bought over almost by the same companies that they once collaborated with in search of a new, large market.
 

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The Climate Pledge, co-founded by Amazon, has introduced a landmark evidence-based framework for converting India's diesel freight fleet to battery electric trucks, developed alongside the C40 Cities climate network. The National EV Highway Guidance Framework lays out a staggered timeline starting with 20 priority highways named by the Ministry of Heavy Industries, with an initial target of 2027. The plan extends to industrial zones and port connections, aiming for a fully integrated electric freight network nationwide by 2035.

India faces rapidly rising freight demand, projected to grow more than four times by mid-century. Roadways already handle nearly seventy percent of all goods moved, and despite medium and heavy trucks representing only three percent of vehicles, they generate roughly 53 percent of particulate emissions. Electrifying freight supports the national goal of reaching net-zero emissions by 2070.

The framework builds on the Laneshift pilot, a collaboration that united truck makers, fleet operators, logistics firms and financiers. On the Bengaluru–Chennai corridor, electric trucks logged over 200,000 kilometres across 600 trips, providing data on performance and operating costs while encouraging early adoption through multi-year contracts. A 6,500-kilometre trial along the Golden Quadrilateral further tested scalability. The pilot proved operational feasibility across all scenarios and commercial viability for daily runs above 400 kilometres, resulting in a 4.2-fold jump in electric truck orders and long-term commercial agreements.

The framework outlines priorities spanning charging infrastructure, demand generation and fleet operations. Aligned with the government's push for electrification, the roadmap offers a practical pathway to transform one of India's most emissions-intensive sectors.

Dr O P Agarwal, Distinguished Fellow, NITI Aayog, said, “India’s transition to cleaner freight will require strong collaboration across government and industry. The EV Highway Guidance Framework launched under the Laneshift programme today is an important step in this direction and will help create a scalable pathway for electric trucking in the country. Through the e-FAST India platform, NITI Aayog has been bringing together logistics operators, OEMs, energy providers and financial institutions to build an enabling ecosystem for freight electrification. Building on these efforts, partnerships led by C40 Cities, The Climate Pledge and private sector stakeholders such as Amazon and Ashok Leyland demonstrate how collaborative action can help move electric freight from pilots to large-scale deployment.”

Abhinav Singh, VP, Operations, India and Australia, Amazon, said, “We continue to invest in making our operations more sustainable, and electrifying our logistics is a key part of that effort. Through The Climate Pledge, we are also working with stakeholders to help scale electric freight solutions more broadly in India. The project findings and framework are encouraging and reinforce the importance of continued collaboration between government and industry to accelerate adoption.”

Naim Keruwala, Regional Director for South and West Asia at C40 Cities, said, “Decarbonising freight is not a future ambition; it is an immediate economic and public health imperative for the country. Laneshift has shown that zero-exhaust-emission trucks can operate commercially on long-haul corridors, that costs are coming down and that when the right stakeholders align their efforts, barriers give way. India has the scale, the policy momentum and the industry appetite to be the next frontier.”

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The share of electric buses in new bus sales in India is expected to reach 35-40 percent by FY2035, from the current level of around 7 percent states a recent report titled ‘Electrifying India’s Bus Industry – The Decade of Transformation’ by KPMG.

It indicates that the bus sector is entering a phase of structural change with the shift being driven by urbanisation, sustainability commitments and government-led mobility initiatives.

The report notes that the Indian bus market, which typically averages 35,000 to 50,000 units annually, is transitioning due to electrification and infrastructure investment. Buses currently account for nearly 57 percent of passenger-kilometres travelled in the country. Data shows that 16,300 electric buses were operational in India as of March 2026, and approximately 62,000 e-bus tenders have been issued to date.

Rohan Rao, Partner, KPMG India, said, “India’s electric bus transition is moving beyond a policy-led initiative to becoming a structural transformation opportunity for the broader mobility ecosystem. Public transport electrification has already created strong momentum, supported by government procurement programmes, improving cost economics, and increasing infrastructure investments.”

Raghavan Viswanathan, Partner, KPMG in India, added, “India’s e-bus ecosystem is entering a critical phase where scale, localisation and execution capabilities will become key differentiators. While public transport undertakings continue to lead adoption, the next phase of growth is expected to emerge from private intercity mobility, airport transport, platform-based mobility solutions and corporate fleets.”

The analysis finds that electric buses offer 70 percent higher energy efficiency and lower lifetime emissions than diesel equivalents. In public intracity operations, electric buses have reached total cost of ownership parity with diesel and CNG variants under high-utilisation scenarios.

Government schemes, such as PM-eBus Sewa, are projected to save between 1 and 2 million tonnes of CO2 and reduce oil imports by USD 2 to 3 billion over the concession period.

Projections suggest that India will tender nearly 40,000 additional electric buses by 2030. Within the public transport segment specifically, electric vehicle penetration is expected to exceed 85 percent by FY2035. Coordination between manufacturers, financiers and infrastructure providers remains a factor in achieving these targets.

Representational image courtesy: Tata Motors

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On May 14, 2026, Japanese automotive major Honda Motor Co, unveiled a comprehensive roadmap to restructure its automobile business, prioritising a ‘multi-faceted approach’ to carbon neutrality that leans heavily on next-generation hybrid technology and strategic growth in three key regions.

Facing a challenging global environment and a slowing EV market, Honda is reallocating resources to ensure a return to record profitability by FY2029.

Interestingly, it has identified India as one of three ‘priority regions’ (alongside North America and Japan) central to Honda's future growth strategy. To address past limitations in the region, Honda is shifting away from standard global specifications toward a market-specific approach.

The Japanese automotive major has announced the establishment of a new subsidiary – Honda Digital Innovation India (HDII), which will be based in Bengaluru. This new subsidiary will build a digital platform to integrate motorcycle and automobile services, creating a unique mobility ecosystem.

Furthermore, in 2028, Honda will introduce strategic models tailored to Indian preferences, specifically targeting the high-volume ‘under 4 meters’ category and the mid-size segment.  

Leveraging its massive motorcycle footprint (nearly 6 million units sold annually), Honda aims to capture customers upgrading from two-wheels to entry-level automobiles.

Honda has announced its plans to increase its annual two-wheeler production capacity in India from 6.25 million to 8 million units by 2028, positioning the country as a primary global export hub.

In addition, a new financial services arm is scheduled to become operational by March 31, 2027, to bolster sales opportunities in India.

While Honda remains committed to carbon neutrality by 2050, it is strategically slowing some EV initiatives – including suspending a comprehensive EV value chain project in Canada – to focus on the immediate demand for hybrid vehicles.

The ‘Triple Half’ Approach

To compete with emerging OEMs, Honda is implementing a lean manufacturing and development strategy. The ‘Triple Half’ initiative seeks to reduce development costs, timeframes and workloads by 50 percent compared to 2025 levels.

Honda aims to improve production efficiency by 20 percent over the next five years through digital transformation and AI.

The company will move away from complete internalisation, instead leveraging external partnerships for batteries (such as the L-H Battery joint venture) and standardising components to mitigate tariff impacts and supply risks.

Honda anticipates that these structural changes will lead to a record-high operating profit of JPY 1.4 trillion by FY2029. During this period, the company plans to invest JPY 6.2 trillion in total resources, with JPY 4.4 trillion specifically dedicated to petrol and hybrid models. For shareholders, Honda has committed to stable and continuous dividend payments with a target 3 percent Dividend on Equity (DOE).

Toshihiro Mibe, Director, President and Representative Executive Officer (Global CEO), Honda Motor Co, said, “India is one of the few markets in the world where further expansion is expected in the future. However, currently, Honda is present in only a limited range of product segments and has not been able to fully expand sales volume due to an insufficient number of competitive models in each segment. One contributing factor is that we have not been able to deliver products fully aligned with the characteristics and preferences of customers in India. It has been our standard approach to develop all products based on global standard performance specifications, regardless of target countries and regions and to sell such products in different regions.”

“However, climate conditions, vehicle usage patterns, customer preferences and other factors vary significantly from country to country and region to region. As environmental regulations and other laws and rules are also different, in some cases, the global specifications of our vehicles have been somewhat excessive in the Indian market. Therefore, we will redefine the best specifications that are well aligned with the market environment and customer needs in India.

“Then, in 2028, we will begin introducing strategic models tailored to the Indian market that pursue an optimal balance of performance and price that satisfies our customers in India. To be more specific, we will launch our strategic models in two categories. One is for ‘vehicles under 4 meters in length’, which has the largest volume in India, and the other is the mid-size category. We will proactively utilise local development resources, including external resources, and introduce new models as quickly as possible. The solid foundation of our motorcycle business will become the key strength of Honda in this market," said Mibe.

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The Indian automotive industry continues to grow leaps and bounds. In fact, as per the latest data released by the Society of Indian Automobiles Manufacturers (SIAM), a total of 2.37 million vehicles were sold last month, up 28 percent YoY, as against 1.85 million vehicles sold in April 2025.

In April 2026, the two-wheeler segment at 1.87 million units, up 28 percent YoY, three-wheelers at 65,558 units, up 33 percent YoY and passenger vehicles at 437,312 units, up 25 percent YoY, all clocked high double-digit growth.

Notably, passenger cars segment grew at 33 percent, SUVs at 21 percent, motorcycles at 31 percent, three-wheelers e-cart at 55 percent and goods carrier at 45 percent, YoY, respectively, reported robust growth.

Rajesh Menon, Director General, SIAM, said, “Continuing with the momentum of the second half of FY 2025-26, the first month of FY 2026-27, posted high double-digit growth in passenger vehicles, three-wheelers and two-wheelers. In April 2026, the passenger vehicles recorded their highest-ever sales of 437,312 units with a growth of 25.4 percent, over April 2025. Three-wheelers also posted its highest ever sales of 65,558 units, registering a growth of 32.8 percent, compared to April 2025.”

“Though there are concerns of high commodity prices emanating from the disruptions in West Asia, Industry has been witnessing good demand,” he concluded.

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