India launches e-truck initiative

The Indian government has launched a groundbreaking scheme to provide financial incentives for electric trucks (e-trucks), aiming to accelerate the country’s transition to clean, efficient, and sustainable freight mobility, as per an Indian Press Information Bureau (PIB) press release. Key sectors set to benefit include the cement industry, ports, steel, and the logistics sector.

To qualify for the incentives, the scrapping of old, polluting trucks is mandatory ensuring a dual benefit of modernising vehicle fleets and reducing emissions. This initiative by the Ministry of Heavy Industries (MHI) aligns with the broader objective of building a self-reliant electric mobility ecosystem. By extending incentives to e-trucks, the scheme aims to reduce operational costs for transporters, encourage clean energy adoption in the heavy vehicle segment and enhance air quality in urban and industrial regions bringing India closer to a sustainable, low-carbon future, the press release adds.

An article by experts from the International Council on Clean Transportation states that on July 11, 2025, when the MHI officially released guidelines for subsidies under the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme, it marked a historic moment for India’s transport sector. For the first time, electric trucks (e-trucks) are being supported by specific incentives at the national level. With a budget allocation of Rs 5000 million aimed at supporting around 5500 e-trucks, this initiative provides a critical push to decarbonize India’s freight sector – one of the largest and fastest-growing sources of emissions in the country. Under the new guidelines, medium- and heavy-duty trucks, which are those with a gross vehicle weight of 3.5 tonnes and above, are eligible for subsidies of Rs 5000 per kWh of battery capacity. These subsidies are capped depending on the different categories of gross vehicle weight and provide meaningful cost relief for early adopters.

The article highlights that earlier initiatives primarily targeted buses and urban transport infrastructure. By including e-trucks, the E-DRIVE scheme is recognizing the critical role of goods movement in India’s transport ecosystem. Hence, the article adds that this shift can be a gamechanger both economically and environmentally. E-trucks are central to India’s climate commitments. Life-cycle assessments have estimated that greenhouse gas emissions from e-trucks are 17%–37% less than from diesel trucks, even with today’s power grid. When powered by renewable energy, these life-cycle emissions drop by as much as 85%–88%. To meet its long-term climate targets – including achieving net-zero emissions by 2070 – analysis by the ICCT projects that India will need 100% zero-emission trucks (ZETs) in new sales by mid-century. Moreover, as e-trucks produce no tailpipe emissions, they are vital for improving air quality in freight hotspots such as ports, warehouses, logistics hubs, and industrial clusters. This leads to better public health outcomes for nearby communities. Although e-trucks currently cost 2–3.5 times more to purchase than equivalent diesel trucks, their lower operating and maintenance costs help narrow the total cost of ownership gap to about 1.2–1.5 times. The new subsidies help bridge this gap even further and make e-trucks more attractive to fleet operators.

A report on the World Business Council for Sustainable Development (WBCSD) says that India’s road freight sector is crucial for the economy but contributes significantly to CO₂ emissions and pollution. With freight volumes set to quadruple by 2050, decarbonization is essential. ZETs, primarily electric, offer a scalable solution, eliminating tailpipe emissions and offering operational savings. However, widespread adoption is limited, especially among small and medium freight operators who own over 70% of India’s trucks, due to high upfront costs and lack of access to finance. The current lending system, optimized for diesel trucks, doesn’t support the necessary scale for ZET investment.

The WBCSD article offers a comprehensive financing model is designed to accelerate the ZET transition by tackling these financial barriers and creating a scalable, flexible pathway to unlock ZEV deployment. Developed for the Indian e-truck context, the model is adaptable across vehicle types and geographies. It shows how innovative financing, particularly leasing, can democratize access to ZETs and accelerate the shift to clean freight. For businesses and financial institutions, it highlights opportunities to de-risk investments, attract commercial financing, overcome upfront costs, and unlock a significant market opportunity aligned with climate goals.