Transforming Trucking in India

Four pathways to initiate and then accelerate the transition to zero-emissions trucks

India is well equipped to lead the global zero-emissions trucking transition. However, decisive action is required today by the public and private sector for India to capitalize on the long-term economic and environmental benefits of zero-emissions (battery-electric and fuel cell electric) trucks (ZETs). By improving charging access, using policy mechanisms to mobilize financing, and incentivizing technology innovation, India can leapfrog diesel vehicle use and scale ZET adoption to become a clean freight leader.

The Economic and Environmental Case for the ZET Transition

As truck travel increases, reliance on fossil fuel vehicles will continue to increase transportation costs, exacerbate air pollution, worsen public health, and produce high CO₂ emissions. ZET adoption presents a tremendous opportunity for sustained fuel cost savings, significant logistics cost savings, and greater energy security for India. ZETs present an opportunity for a 17 percent reduction in logistic costs, directly reducing the cost of end goods and commodities, benefiting the public. Additionally, road freight accounts for more than 25 percent of annual oil imports. ZET adoption can reduce oil spend by 838 billion liters of diesel cumulatively by 2050, resulting in upward of ₹116 lakh crore ($1.5 trillion) savings on oil expenditures.

Road freight transportation is one of the fastest-growing sources of carbon emissions in emerging markets like India. Today, trucks represent just 3 percent of the total vehicle fleet (including both passenger and freight) yet are responsible for 34 percent of carbon dioxide (CO₂) emissions and 53 percent of particulate matter (PM) emissions. A purposeful transition to ZETs can improve air quality and public health. Similarly, widespread ZET adoption can lead to up to 3.8 gigatons of cumulative CO₂ savings through 2050 — one of the world’s most significant decarbonization opportunities in the transportation sector.

With dedicated production facilities for ZETs, electric trucks can achieve total cost of ownership parity with diesel fuel trucks for medium-duty trucking applications. TCO parity for heavy-duty trucking applications can feasibly be reached by 2027. These economic advantages make transitioning to zero-emissions trucking fleets cost-effective today.

How to Get There

Coordinated public and private sector actions are needed to overcome upfront capital constraints, increase manufacturing and supply, and deliver the required charging infrastructure to support a robust ZET ecosystem. Both the public and private sector play a key role in facilitating the ZET transition; innovative policy, infrastructure, technology, and finance strategies are needed to capture the opportunities of ZETs on an accelerated time frame.

Policy action: Supportive demand- and supply-side policies for ZETs can help catalyze the nascent market and spur demand. Policies can send powerful market signals and can encourage private sector investment in technology development and innovation and encourage OEMs to increase their production capacity.

Charging infrastructure: Cohesive private and public partnerships are needed to deploy the physical infrastructure required to realize the benefits of ZETs on an accelerated timeline. Different businesses will have varying demands for charging, and no one charger or charging utilization strategy will fit every use case. The deployment of private depot versus public en-route chargers will depend on the changing needs of fleets, existing electrical infrastructure, and the ability of private and public sector stakeholders to develop comprehensive charging solutions.

Technology and manufacturing: To emerge as a global leader in the zero-emissions trucking economy, India can look to 1) modernize and localize its ZET supply chain, 2) leverage existing schemes to increase battery manufacturing and battery recycling programs, and 3) encourage and incentivize investments in R&D and technology innovation. Creating a ZET market in India supports national priorities and can underpin programs like the National Energy Storage Mission. By 2050, ZETs could create up to 4,000 GWh of cumulative battery demand in India.

Financing: Financial strategies to reduce risk and improve access to credit will enable OEMs, charging infrastructure providers, and fleet operators to finance their transition to ZET vehicles. Furthermore, innovative business models such as battery and vehicle leasing schemes can effectively lower the cost of ZET ownership, increase vehicle utilization, and foster market growth.

ZETs support India’s vision of self-reliance and can enable India to become a global clean freight leader. ZET adoption presents a tremendous opportunity for sustained fuel cost savings and can lead to significant logistics cost savings and improvements in air quality. Cohesive private and public partnerships can coalesce to deploy the physical infrastructure and market conditions required to realize the benefits of ZETs on an accelerated timeline. By leveraging India’s existing electric vehicle policy frameworks, experienced manufacturing sector, and dynamic start-ups, India can position itself as a low-cost, low-carbon manufacturing hub.