The centre’s ambitious push to electrify the heavy trucking segment under the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme has got off to a sluggish start, with only three electric trucks deployed since the scheme was rolled out in September 2024, despite a ₹500 crore allocation for the segment.
The slow uptake comes even as the Centre has set a target to support deployment of over 5,600 electric trucks under the broader ₹10,900-crore PM E-DRIVE programme aimed at accelerating adoption of clean mobility solutions.
Industry executives attributed the poor response to a combination of high acquisition costs, limited subsidy support, mandatory scrapping norms and reluctance among fleet operators to deploy electric trucks at scale.
“The economics are still challenging for fleet operators. Even after incentives, electric trucks remain significantly more expensive than diesel vehicles, while charging infrastructure and resale value concerns continue to weigh on purchasing decisions,” said a senior executive at a leading commercial vehicle maker.
Cost Barrier
According to industry estimates, a 3.5–7.5 tonne electric truck costs as much as ₹34 lakh, nearly double the ₹17 lakh price tag of a comparable diesel vehicle. Heavy-duty electric trucks in the 55-tonne category can cost as much as ₹1.25 crore. While the scheme offers incentives linked to gross vehicle weight (GVW), capped at ₹9.6 lakh per vehicle, industry players say the subsidy is insufficient to materially bridge the cost gap.
“The subsidy helps, but not enough to make total cost of ownership attractive in the absence of high utilisation and reliable charging networks,” said another executive.
The scheme also mandates submission of scrapping certificates, or certificates of deposit (CDs), before incentives can be claimed. The provision was introduced to encourage removal of old polluting trucks from roads, but manufacturers say it has emerged as another bottleneck.
“Many transporters are unwilling to scrap relatively usable diesel trucks immediately, especially when electric alternatives are still being tested operationally,” an industry official said.
Manufacturers including Tata Motors, Ashok Leyland, IPLTech Electric and Propel Industries are producing electric trucks for the domestic market. However, executives said most current deployments are being driven through pilot projects and preferential commercial arrangements between manufacturers and private fleet operators or other conglomerates to establish use cases.
Localisation Dilemma
The scheme also requires more than 50% domestic value addition (DVA) for vehicles to qualify for incentives. Industry stakeholders said localisation targets remain difficult due to dependence on imported battery cells and components.
“The localisation ecosystem for heavy electric trucks is still evolving. Achieving prescribed DVA thresholds at competitive costs remains a challenge for OEMs,” said a person aware of the matter.
Despite the weak start under PM E-DRIVE, the electric commercial vehicle segment has shown early traction. Around 843 electric medium and heavy commercial vehicles were registered in India during the period, according to industry data.
However, all these vehicles are deployed without government incentives.
The government sees electrification of freight transport as critical to reducing emissions, with the transportation sector accounting for nearly 12% of the country’s carbon emissions, according to the International Energy Agency.