The PM E-Drive scheme, a demand incentive scheme launched in September 2024 to aid faster adoption of electric vehicles, is likely to have only a limited impact on electrification in the truck segment. A precondition that necessitates the consumer to buy an electric truck with a certificate of deposit obtained after scrapping an old vehicle, can be a deterrent, said executives at truck makers.
“Though it’s a good move, linking it with scrapping the old vehicles is not feasible because the price gap between the value of the scrapped diesel truck and a new electric one is huge,” said an executive at a truck maker. Buying an e-truck is out of bounds for those scraping the truck, noted.
The scheme allows a consumer who didn’t previously own a truck to get a scrapping certificate from somebody else to avail of incentives while buying. The incentive amount for e-truck is likely to be announced later this month. Girish Wagh, executive director, Tata Motors, pointed out that while initiatives like the PM e-Drive provide the much-needed push for EV adoption in the M&HCV segment by “fostering industry confidence and accelerating investments in cleaner technologies.” However, it would find greater merit in specific applications. “Based on our interactions with customers, electrification will become attractive in short to medium range, geo-fenced applications with suitable incentive structure and ecosystem support.”Under the INR 10,900-crore scheme, the government plans to give incentives worth INR 500 crore for electric trucks—those with a gross vehicle weight of 3.5 tonnes and above. It’s the first-time that electric trucks have been included in the government incentive programme. Inadequate charging infrastructure may keep it confined for only those trucks that ply for 150 to 200 kms in close loops, said executives at the truck makers.
As per a concept draft note titled “Incentives for electric trucks under PM E-DRIVE Scheme” released by International Council of Clean Transportation (ICCT), an independent research firm, in November 2024, electric trucks in India using grid-average electricity produce 17-29% fewer greenhouse gas emissions compared to diesel trucks and 78-83% fewer with renewable energy. They are also 65% more efficient, cutting fuel consumption and costs.
With zero emissions, electric trucks help reduce air pollution, crucial for cities like New Delhi where diesel vehicles cause 60% of transport-related health issues. The note stated that the cost of a rigid 16-tonne electric truck in India is estimated to be about 4 to 6 times the cost of their diesel-equivalent models.
VG Ramakrishnan, managing partner, Avanteum Advisors, a management consulting firm points out that those scrapping their 15-year-old truck are at the bottom of the pyramid and can’t afford even a new diesel or a CNG truck. Electric will be out of his bounds even with incentives. “The economics of operations will become an impediment in the adoption of electricity,” he said.
Within the heavy trucking segment, for long-haul application, battery electric vehicles are currently uncompetitive due to the larger size of batteries needed to deliver longer range 800 plus kilometers, noted Wagh. “Such a design with larger batteries brings a number of challenges such as higher acquisition price, loss of payload due to increased kerb weight, and equally important—longer charging time,” he said. An email sent to Ashok Leyland last week remained unanswered until press time.
According to Wagh, in mid-term, hydrogen internal combustion engine technology is expected to mature faster, followed by maturation of fuel cell technology in the later part of the decade, both requiring enabling incentive push and ecosystem development which includes hydrogen refuelling stations and financing.
