In response to the significant environmental challenges posed by climate change driven by global warming, the automotive industry is accelerating the transition toward electrification. While electric vehicles offer considerable potential for mitigating CO₂ emissions, their elevated upfront costs pose a notable challenge to large-scale market penetration. Energy efficiency improvement of electric vehicles is emerging field of research to reduce total cost of ownership. Electric vehicle powertrain component selection in small commercial vehicles including three and four wheelers is a complex process which has to fulfil multiple requirements Range, performance, drivability, packaging, total cost of ownership of vehicle and comfort. In addition, powertrain configuration including battery, motor and transmission ratio selection plays a fundamental role in cost of electric vehicle. Hence, The task of selecting the right powertrain configuration, encompassing architecture, motor selection, and gear ratio, is a critical challenge in optimizing overall vehicle performance while addressing the constraints and objectives of conventional vehicles. This study focuses on benefits of 2 speed transmission ratio for small commercial electric vehicle segment. The automotive market in India is analysed and the small commercial vehicle segment selected to define powertrain configuration. "The principle is grounded in the requirements for vehicle performance, design, cost, and efficiency, each of which must be carefully balanced to achieve optimal outcomes. The simulation are done to estimate motor torque/power requirements & overall gear ratios meeting the vehicle target and constraints. Based on the analysis, a comparative matrix consisting of various parameters for small commercial vehicle (SCV) application is established. The analysed results and established comparative matrix conclude that 1. Small commercial vehicles necessitate an E-Drive system with high torque capability at low speeds, requiring deeper gear ratios, a lower maximum system speed, and overall reduced costs. For equivalent power ratings, motors with higher peak torque tend to be more expensive than those used in passenger vehicles, which typically employ motors with lower peak torque. 2. 2 speed transmission, first gear increases gradeability performance by more than 100% with same motor and second gear allows motor to work in higher efficiency zone results up to 5% EV Range improvement 3. This approach allows to reduce the peak motor power/torque by 20-30% due to 2 speed gearbox, this is huge cost reduction solution with modularity. 4. This approach enables a reduction in the average current draw by approximately 30%, leading to a decrease in the C-rate during discharge. This not only enhances the thermal performance of the battery pack but also extends its operational lifespan, potentially allowing for an extended warranty offering. Consequently, this reduces the need for the OEM or Tier-1 suppliers to purchase additional warranty instruments to mitigate the risks associated with the most expensive component in electric vehicles-the battery pack Considering the significant volume of the electric three-wheeler (e3W) market, it would be prudent for OEMs to explore the adoption of a two-speed automatic gearbox as a standard offering for light commercial vehicles (LCVs), especially if they have previously overlooked this rapidly growing sector. Key Words - Small Commercial EV, Electric Vehicle, 2 speed transmission, Targets & Constraints, Performance, Packaging constraints, Efficiency, Design limit.