Transforming Trucking in India: Pathways to Zero-Emission Truck Deployment

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Transforming
Trucking in India
Pathways to Zero-Emission Truck Deployment
NITI Aayog, RMI | September 2022 NITI Aayog
The National Institution for Transforming India (NITI Aayog) was formed via a resolution of the Union Cabinet on 1 January 2015. NITI Aayog is
the premier policy ‘Think Tank’ of the Government of India, providing both directional and policy inputs. While designing strategic and long-
term policies and programmes for the Government of India, NITI Aayog also provides relevant technical advice to the Centre and States. The
Government of India, in keeping with its reform agenda, constituted NITI Aayog to replace the Planning Commission instituted in 1950. This was
done in order to better serve the needs and aspirations of the people of India. An important evolutionary change from the past, NITI Aayog acts
as the quintessential platform of the Government of India to bring States to act together in national interest, and thereby fosters Cooperative
Federalism.
About RMI
RMI is an independent nonprofit founded in 1982 that transforms global energy systems through market-driven solutions to align with a 1.5°C
future and secure a clean, prosperous, zero-carbon future for all. We work in the world’s most critical geographies and engage businesses,
policymakers, communities, and NGOs to identify and scale energy system interventions that will cut greenhouse gas emissions at least 50
percent by 2030. RMI has offices in Basalt and Boulder, Colorado; New York City; Oakland, California; Washington, D.C.; and Beijing. RMI has been
supporting India’s mobility and energy transformation since 2016.
About Us Authors and Acknowledgements
Authors
NITI Aayog
Sudhendu J. Sinha
Joseph Teja
RMI
Contacts
For more information, contact:
info@rmi.org
Acknowledgments
We would like to acknowledge Clay Stranger, Dave Mullaney, Samhita
Shiledar, Marie McNamara, Pranav Lakhina, and Jake Straus of
RMI, and Chetna Nagpal, and Isha Kulkarni of RMI India for their
contribution to the development of this report
Suggested Citation
NITI Aayog, RMI, Transforming Trucking In India: Pathways to Zero
Emission Truck Deployment, September 2022.
Available at NITI Aayog:
https://www.niti.gov.in/documents/reports/
Available at RMI:
https://rmi.org/insight/transforming-trucking-in-india/
All images from Shutterstock unless otherwise noted. India is well-positioned to become a crucial player in the inevitable transition to zero-emission freight vehicles.
India is experiencing historical growth — urbanisation, population increase, the rise of e-commerce, and increasing income levels have
heightened the demand for goods and services. The road freight sector is expected to grow fourfold by 2050 to meet this rising demand. By
continuing to run on fossil fuel these burgeoning fleets will only further pollute air, exacerbate public health hazards, increase energy costs, and
drive-up emissions at a time when many countries are working valiantly to bring them down. In India, for example, using conventional trucks to
meet growing demand would require spending over US$1 trillion cumulatively on crude oil imports for diesel production by 2050.
ZETs are the clear-cut solution to all of these problems and more. By reducing both air pollution and costs while enhancing industrial
competitiveness, ZET adoption can directly support the citizens and the Indian economy in addition to helping meet climate targets.
The Indian economy is poised to leapfrog diesel vehicles and scale ZET adoption. This will require synchronised effort amongst private
and public actors to increase the manufacturing supply and deliver the needed charging infrastructure to support a robust ZET ecosystem.
Policymakers can draw on previous national and state incentives that helped spur demand for passenger electric vehicle adoption. By
coordinating similar efforts, they can help industry players transfer risk, reduce costs, and seed the nascent ZET market — ultimately
harmonising ZET demand and supply to drive market scale.
We hope that this report will act as a foundation and prompt collaboration to make a ZET future a near-term reality in India. By pioneering early
ZET adoption, ecosystem actors can unlock substantial economic, energy security, and emissions benefits for India, and together claim our
position as a global leader in this urgent shift.
Mr. Clay Stranger,
Managing Director of RMI
Foreword Table of Contents
Executive Summary...................................................................................................................................... 6
Introduction................................................................................................................................................. 12
Economic Analysis........................................................................................................................................ 17
Key Findings................................................................................................................................................. 24
Solutions...................................................................................................................................................... 35
Policy Interventions.................................................................................................................................................. 39
Charging Solutions.................................................................................................................................................... 47
Technology and Manufacturing............................................................................................................................... 61
Financing and Business Models............................................................................................................................... 69
ZET Corridors as an Intersection of Solutions................................................................................................ 79
Conclusion and Next Steps............................................................................................................................ 86
Technical Appendix....................................................................................................................................... 91
Policy Appendix............................................................................................................................................ 96
Endnotes...................................................................................................................................................... 100 Executive Summary
TRANSFORMING TRUCKING IN INDIA | 6 India’s trucking market is expected to grow over 4x by
2050 — fueling the nation’s economy and transportation
emissions
India is the world’s sixth-largest economy, with a GDP close to US$3
trillion and growing.
1
The freight transportation sector is growing
rapidly to ensure more goods and products reach a rising number of
end consumers. Currently, India transports ~4.6 billion tonnes of freight
annually, generating transport demand of 2.2 trillion tonne-kilometres
(tonne-km) at the cost of ₹9.5 lakh crore.
2
Demand for goods is rising
with urbanisation, population increase, the rise of e-commerce, and
rising income levels. As this demand continues to grow, associated
road freight movement is expected to increase to 9.6 trillion tonne-km
by 2050.
Road transport (i.e., trucks) carries the bulk of India’s goods, 70% of
today’s domestic freight demand. Heavy- and medium-duty trucks
(HDTs and MDTs, respectively) are responsible for most of that road
transportation. And as road freight travel continues to grow, the number
of trucks is expected to more than quadruple, from 4 million in 2022 to
roughly 17 million trucks by 2050 (see Exhibit 2, page 16).
In light of these market trends, zero-emissions trucks (ZETs) — including
battery electric trucks (BETs) and fuel cell electric trucks (FCETs) —
offer a compelling alternative to the diesel trucks that dominate India’s
road freight today. ZETs do not have tailpipe emissions and have lower
operating costs, presenting an opportunity for India to showcase how
the adoption of ZETs is economically efficient and better for air quality,
public health, and environment.
Indiaʼs opportunity to become global manufacturing
hub for ZETs
Realising the economic and environmental benefits of ZETs, many
countries are transitioning away from diesel trucks. The European Union
has committed to electrifying freight vehicles, setting an objective
to have 80,000 ZETs on the road by 2030; the United Kingdom has
announced a pledge that all HDTs will be ZETs by 2040.
3
California
adopted the Advanced Clean Trucks regulation requiring manufacturers
to sell an increasing percentage of ZETs and the first global agreement
on ZETs formed at COP26.
4
Increasingly, international platforms like the
Zero Emission Vehicles Transition Council are creating global discourse
on the ZET opportunity.
Scaling ZET adoption can enable India to differentiate itself in the global
export market. As supply chains continue to become increasingly global,
the most substantial growth in freight and trucking demand will be from
emerging markets like India. India has the opportunity to exhibit global
leadership by scaling ZET adoption. The growth of India’s ZET market
will require coordinated private and public actions to increase the
manufacturing supply of ZETs and deploy the supporting charging
infrastructure. Ambitious policies are required to drive growth, seed the
market, and accelerate ZET supply and demand.
Key findings: ZETs can produce economic, energy
security, and emissions benefits for India
In this report, we analysed India’s potential for ZETs in four common
scenarios for MDTs and HDTs in road freight trucking:
1. MDT operating short intrastate
2. MDT for regional haul
3. HDT for regional haul
4. HDT for long haul
This report takes a conservative approach to assessing capital and
operating costs of ZETs based on the technology available today
and with scaled vehicle manufacturing and charging infrastructure
utilisation. In a mature production scenario, our analysis found
meaningful economic, public health, industrial competitiveness, and
emissions-saving opportunities for India. Highlights include:
TRANSFORMING TRUCKING IN INDIA | 7 3. If produced at scale, the total cost of ownership (TCO) for
ZETs in MDT segment can be less than diesel trucks, and TCO
parity can be reached in the HDT segment by 2027. Currently,
ZETs have a higher upfront cost compared to diesel trucks, but
ZETs also have significantly lower per-kilometre operating costs.
7. Widespread ZET adoption could reduce annual trucking
carbon emissions 46% by 2050, lowering the nation’s
greenhouse gas (GHG) emissions. The trucking sector is
responsible for one-third of transport-related CO
2
emissions in India.
A determined transition to ZETs can lead to 2.8–3.8 gigatonnes of
cumulative CO
2
savings through 2050, which is equal to or greater
than India’s entire economy-wide annual GHG emissions today.
8. The early state of the overall ZET market in India requires
a coordinated ecosystem approach spanning the public
and private sectors. Such an approach can help overcome
challenges such as the upfront capital needed to make the
ZET transition through a combination of finance, technology,
infrastructure, and policy strategies.
4. With supportive polices ZETs can achieve an 85% sales
penetration by 2050. With cost competitiveness, and
technology maturity, nearly 9 in 10 trucks sold in 2050 can be
ZETs.
5. ZETs can help shift India off oil import dependency,
supporting the vision of a self-reliant India.
Today, road freight accounts for more than 25% of oil import
expenditures—and is expected to grow over 4x by 2050.
ZET adoption can eliminate a cumulative total of 838 billion
litres of diesel consumption by 2050, which would reduce oil
expenditures by ₹116 lakh crore through 2050.
6. Widespread ZET adoption could reduce cumulative trucking
particular matter (PM) and nitrous oxide (NOx) pollution
~40% by 2050, substantially improving air quality in India.
Today, trucks represent just 3% of the total vehicle fleet (including
both passenger and freight) yet are responsible for 53% of PM
emissions.
6
A purposeful transition to ZETs can lead to considerable
improvements in air quality and benefit citizens’ public health.
1. ZETs can lead to sustained logistics cost savings.
Transportation costs are a major driver (62%) of overall logistics
costs in India, accounting for 14% of India’s GDP.
5
Since diesel fuel
costs account for the overwhelming majority of transportation costs,
ZET adoption can dramatically lower associated fuel costs by up
to 46% over the vehicle's lifetime, with broad implications for the
Indian economy.
2. A robust domestic ZET market can transform India into a
global green hub for battery manufacturing. ZETs would
be a significant source of demand for domestically produced
batteries (up to 4,000 gigawatt-hours [GWh] cumulative through
2050), supporting and underpinning the National Energy
Storage Mission and providing the impetus for the nation to
become a low-cost and low-carbon manufacturing hub.
TRANSFORMING TRUCKING IN INDIA | 8 Strategies and solutions for scaling India’s ZET market
India can seize the far-reaching benefits of a ZET future through a blend of strategies and solutions, including:
yDemand-side policies to increase consumer demand, such
as purchase subsidies, feebates, interest subvention, scrappage
incentives, zero-emissions zones, and fleet purchase requirements.
ySupply-side policies to encourage traditional OEMs to
innovate and start-ups to enter ZET manufacturing, such as
original equipment manufacture (OEM) ZET credit schemes, ZET
production targets, air quality regulations, and fuel efficiency
standards that promote ZETs and improve air quality.
yProvide a mix of charging strategies and types, with a focus on
depot charging and en-route fast charging, which together can
provide charging coverage for both short- and long-range freight
trucking needs.
yLeverage policy intervention to reduce charging costs,
including upfront subsidies, electricity tariffs that remove demand
charges and/or implement EV-friendly rate structures, and
concessional land for building out ZET charging infrastructure.
yStrategically build adequate power infrastructure to meet
the electricity needs of a growing ZET market, including load
assessments, dedicated funding for infrastructure buildout,
demand-side management, investment in energy storage, and
smart charging capabilities.
yStreamline the infrastructure installation process to minimise
the permitting and interconnection processing times; also
streamline the land procurement process for charging infrastructure
development to minimise charging deployment soft costs.
yImprove battery chemistry, energy density, and fuel cell
efficiency to increase the range and improve the payload
capacity of ZETs.
yFoster a domestic manufacturing strategy to help build a
robust supply chain of wide varieties of ZETs, in turn helping
fulfil India’s long-term trucking demands.
yCentral and state governments can mitigate risks of
investing in ZET production and expand access for ZET
purchase via strategies such as public-backed loans, demand
aggregation, and interest subvention schemes and risk-sharing
mechanisms.
yOEMs and fleet operators can update their business models
to lower the cost of owning ZETs and ultimately help nudge
sector-wide adoption via strategies such as lease purchasing,
battery leasing or financing, as-a-service business models,
performance guarantees, and more-robust and/or extended
warranties.
yLenders and other financial institutions can work to
structure more-favorable financing for ZET loans through
tailored loan products, better-informed depreciation criteria,
and alternative credit evaluations.
POLICY
CHARGINGFINANCING & BUSINESS MODELS
TECHNOLOGY & MANUFACTURING
TRANSFORMING TRUCKING IN INDIA | 9 Exhibit ES1: Pathways to ZET adoption in India
Pathways to ZET adoption 
in India
• Central and state governments 
can mitigate risks of investing 
in ZET production and expand 
access for ZET purchase.
• OEMs and fleet operators can 
update their business models 
to lower the cost of owning 
ZETs and ultimately help 
nudge sector-wide adoption.
• Lenders and other financial 
institutions can work to 
structure more favorable 
financing for ZET loans.
Financing & Business Models
•  Introduce demand-side 
policies to increase 
consumer demand.
•  Craf supply-side policies to 
encourage traditional OEMs 
to innovate and start-ups to 
enter ZET manufacturing.
Policy
• Improve battery chemistry, 
energy density, and fuel cell 
eficiency. 
• Enhance performance 
characteristics such as 
payload capacity. 
• Foster a domestic 
manufacturing strategy.
Technology & Manufacturing
•  Provide a mix of charging 
strategies and types.
•  Leverage policy intervention 
to reduce charging costs.
•  Strategically build adequate 
power infrastructure.
•  Streamline the infrastructure 
installation process to 
minimise processing times.
Charging
TRANSFORMING TRUCKING IN INDIA | 10 ZET corridors can be a catalyst that aligns ecosystem
solutions
Currently, 50% of India’s vehicle freight traffic travels along seven
major corridors, connecting the country’s cities and ports. The
concentration of road freight travel and economic activity along
these corridors presents an opportunity to strategically invest in
charging infrastructure development to scale ZET adoption. Enabling
ZETs on high-use routes can build market momentum and empower
invaluable testing and refining of best-in-class solutions.
Effective multistakeholder collaboration is the key to
accelerated ZET deployment
India is in a prime position to stand as a global leader in the transition
to zero-emissions trucking. In order to realise the significant long-term
economic and environmental benefits of ZETs, however, government,
technology, industry, and finance leaders must align decisively to
develop and enact near-term, precise market and policy intervention.
TRANSFORMING TRUCKING IN INDIA | 11 Introduction
TRANSFORMING TRUCKING IN INDIA | 12 ZETs are becoming a global phenomenon
Corporate social responsibility, consumer awareness, and global
commitments to reduce carbon emissions have driven the transport
sector to become increasingly conscious of the embodied carbon
content of goods. Large fast-moving consumer goods and e-commerce
providers have driven electric MDT and HDT fleet adoption, as
they are gradually being driven by corporate social responsibility
commitments to adopt ZET fleets. In conjunction, major OEMs
are announcing lofty electrification targets and are scaling their
manufacturing of ZETs to meet rising demand. Scania, Volvo, Daimler,
BYD, Chanje, and several other major OEMs have launched MDT and
HDT ZETs that can meet a range of duty cycles and operational needs.
7

These firms recognise the long-term opportunity and inevitable
global market shift to net-zero. Firms are also increasingly forming
joint ventures to raise capital for charging infrastructure to meet the
growing charging demand of ZETs.
8
Volvo, Daimler, and Traton are
investing 500 million euros to build out a high-power electric tuck
network in Europe.
9
Countries and states worldwide are setting zero-emissions freight
targets, and there are now multilateral actions aimed at accelerating
the manufacturing of ZETs. Global platforms like Zero Emission
Vehicle Transition Council (ZEVTC) have provided an invaluable
platform for knowledge sharing and collective action.
10
Additionally,
countries are increasingly forming partnerships to develop joint
pathways to reduce vehicle emissions, particularly for scaling electric
HDTs. As part of the Drive to Zero Campaign, several European
countries as well as Canada and Australia signed a memorandum of
understanding to foster leadership and international coordination to
accelerate ZET adoption.
11
As the countries look to make progress on their nationally determined
contributions (NDCs) and reduce emissions, there is a growing
need to address road transport emissions particularly from the
trucking sector. The global economy is rapidly evolving; costs are
no longer the sole decision-making factor for the private sector, and
policymakers are more acutely aware of the environmental and
social implications of economic activities. Thus, these actors are
more aggressively exploring opportunities to spur ZET development
to remain competitive in global supply chains. Over time ZETs are
rapidly becoming more economically efficient, and the adoption of
ZETs represents a tremendous opportunity to improve air quality and
reduce carbon emissions.
India has an opportunity to capitalise on the nascent ZET market. ZETs
represent a cleaner and cost-effective solution to freight transport and
India can be a key player in the global transition to zero-emissions
freight vehicles. The Indian economy is well-positioned to leapfrog
diesel vehicles and scale ZET adoption. India can exhibit global
leadership by scaling ZET use and garnering a larger market share in
the global transport economy. Domestic policies that spur ZET supply
and demand will be critical for catalysing the domestic ZET market
and catapulting India as a global leader in clean freight transportation.
TRANSFORMING TRUCKING IN INDIA | 13 Road transport (i.e., trucks) carries the bulk of India’s goods, meeting
70% of today’s domestic freight demand and carrying nearly 2.2
trillion tonne-km of freight today (see Exhibit 1). Heavy- and medium-
duty trucks (HDTs and MDTs, respectively) are responsible for most
of the road transportation, accounting for 76% and 21% of the road
freight demand.
By 2050, HDTs’ demand share of road freight travel is expected to
increase to 83%, carrying nearly 8.4 trillion tonne-km of long-haul
freight. MDTs will continue to play an important role in short intrastate
movement and regional movement, accounting for 1.2 trillion tonne-
km by 2050. As road freight travel continues to grow, the number of
trucks plying on Indian roads and highways is expected to more than
quadruple, from 4 million in 2022 to roughly 17 million trucks by 2050.India’s trucking market is expected to grow 4x by 2050
— fueling the nation’s economy and transportation
emissions
India boasts the world’s sixth-largest economy, with a GDP close to
US$3 trillion.
12
The pressure is on the freight transportation sector
to ensure more goods and products reach a rising number of end
consumers, with expedience, economy, and environmental priorities
all front and center.
Currently, India transports around 4.6 billion tonnes of freight
annually at the cost of ₹9.5 lakh crore.
13
Demand for goods is rising
with urbanisation, population increase, the rise of e-commerce, and
rising income levels. As this demand continues to grow, associated
road freight movement is expected to increase to 9.6 trillion tonne-
kilometres (tonne-km) by 2050.
Exhibit 1: Modal split for freight movement in India in 2022
(% of tonne-km)
Exhibit 2: Growth of India’s truck stock and road freight market
through 2050
6%  
6% 
18% 
70%  
76% Heavy-duty truck
3% Light-duty truck 
21% Medium-duty truck
Water
Pipeline
Rail
Road
2022 2030 2040 2050
Tonne-km (trillion) 
Truck stock (millions) 
Truck stock (millions)
MDT and HDT tonne-km
18
16
14
12
10
8
6
4
2
0
12
10
8
6
4
2
0
TRANSFORMING TRUCKING IN INDIA | 14 Exhibit 3: ZET technologies vs. diesel trucks
14
BATTERY ELECTRIC TRUCK FUEL CELL ELECTRIC TRUCKDIESEL TRUCK
DieselFuel
Advantages
Challenges/
Drawbacks
ElectricityGreen Hydrogen
The growth of freight demand and the growing trucking sector is an
integral part the Indian economy and transport system. However,
existing diesel trucks disproportionately contribute to ambient air
pollution. Given the expected market growth, it will be critical to
ensure that new trucks contribute to a cleaner and more sustainable
transport system. Zero-emissions trucks (ZETs) — including battery
yConventional technology
yFaster refueling (vs. BETs)
yReadily available models to fit all
use cases
yNo tailpipe emissions
yLower CO2 emissions (which go
even lower as India’s power grid
shifts to renewable energy)
yUp to 82% "tank-to-wheel"
powertrain efficiency
yLowest operating costs
yPleasant driving experience
yNo tailpipe emissions
yLower CO2 emissions (if powered
by green hydrogen vs. conventional
sources of hydrogen)
yUp to 45% "tank-to-wheel"
powertrain efficiency
yFaster refueling
yEquivalent payloads to diesel trucks
yNascent technology
yHigh cost of producing hydrogen
leading to higher TCO
yNot environmentally friendly if
hydrogen is produced from natural
gas or coal
yLimited range due to battery
capacity
yBigger batteries in heavier trucks
could lead to a weight penalty that
reduces payload capacity
yLonger charging times of 1–8 hours
required for charging
yHighly inefficient
yHigh operating costs, especially for
fuel
yHuge environmental impact in terms
of air pollution and carbon emissions
yUp to 18% "tank-to-wheel"
powertrain efficiency
electric trucks (BETs) and fuel cell electric trucks (FCETs) — offer
a compelling alternative to the diesel trucks as they produce zero
tailpipe emissions and offer an opportunity for sustained fuel cost
savings:, and ZETs can effectively replace existing diesel trucks. Exhibit
3 offers a comparison between ZETs and diesel vehicles, outlining how
ZETs can meet India’s trucking needs effectively.
TRANSFORMING TRUCKING IN INDIA | 15 To assess the economic feasibility of ZETs, we analysed four common
use cases for MDTs and HDTs used for road freight trucking:
1) MDT operating short intrastate, 2) MDT for regional haul, 3) HDT for
regional haul, and 4) HDT for long haul (see Exhibit 4).
Exhibit 4: Four scenarios for MDTs and HDTs in India’s road freight sector
3
200 km - 300 km


1 W

100 km - 150 km









24
TRANSFORMING TRUCKING IN INDIA | 16 Economic Analysis
TRANSFORMING TRUCKING IN INDIA | 17 Understanding ZETs’ cost-competitiveness in relation to diesel trucks will be crucial to achieving a sustainable future for goods transport in
India. To assess the economic feasibility of transitioning to ZETs, we conducted a robust market assessment to derive the capital costs and
vehicle operating costs of ZETs and diesel vehicles in a mature production scenario, i.e. with a dedicated production facility that will lead to
reasonable scale and a competitive market price. Due to the lack of ZETs in the Indian market, we performed a bottom-up analysis which
included calculating the costs of ZETs as if they were produced at scale in the market today. To estimate the costs of ZETs, the battery size
required to meet different use cases was derived based on prescribed travel distances and payload capacities. Vehicle CAPEX was calculated
by adding the cost of batteries, electric motors, power electronics, thermal management, and chassis. Based on conservative cost analysis, the
exhibits below outline the capital and operational costs based on existing technologies. These inputs were then used to estimate and compare
the TCO of ZETs and diesel trucks. The findings below depict the total operating costs of BETs and diesel trucks in a mature market. The cost
figures represent the costs of ZET technology today with scaled vehicle production and charging infrastructure utilisation. These figures capture
the economic opportunity of ZETs; the subsequent solution section addresses how private and public actions to harmonise ZET supply and
demand can enable the market to reach economies of scale efficiently.
For a 12-tonne electric MDT with an 80 kilowatt-hour (kWh) battery, the capital cost is ~2.3 times that of the diesel counterpart. This battery
capacity is sufficient to travel from Mumbai to Pune, for example, or to serve similar use cases for distances in the range of 100–150 km. Due to
the low cost of electricity compared to diesel and lower maintenance costs, the operational cost savings to operate electric MDTs on a per-km
basis is as much as ~₹9/km, resulting in cumulative savings of over ₹55 lakh over the vehicle’s lifetime. This translates to a payback period of
just 5.2 years (i.e., in just over five years, a truck operator will be able to offset the capital cost differential of the electric and diesel truck). On a
TCO basis, an electric truck for this use case is ~16% cheaper than its diesel counterpart when manufacturing capabilities are mature, and the
TCO becomes even more economically beneficial in years to come (Exhibit 5). Overall, the adoption of electric MDTs for regional haul is the low-
hanging fruit that can spearhead the ZET transition in India.
0
4
8
12
16
20
2022 2024 2026 2028 2030
Operational cost savings of INR 9/km
abZ
YX U
Capital cost difference of INR 19 lakh

Total cost of ownership will be lower
Electric
Diesel
INR/km
Electric
34 lakh
Diesel
15 lakh
1
Electric MDTs for short intrastate movement — Delivering operational savings of nearly ₹55
lakh for fleet operators over the vehicle’s lifetime, with a payback period of just 5.2 years
TRANSFORMING TRUCKING IN INDIA | 18
scenario
Exhibit 5: Capital, operational, and total ownership cost of MDTs for short interstate movement (Mumbai to Pune) in a mature production To buy an MDT of the same 12-tonne capacity but with a larger battery size of 150 kWh, the capital cost requirement is 31.3 lakh more than the
diesel truck. However, despite larger battery capacity, the operational cost savings from running an even longer distance of 200–300 km (e.g.,
between Delhi and Jaipur) is ₹7/km. Consequently, the electric MDT fleet operator can save more than one crore over the vehicle’s lifetime.
These operational savings can offset the capital cost differential of an electric MDT in ~6.4 years. Considering massive operational per-km
savings, the TCO of electric MDTs is already ~12% lower than its diesel equivalent. The economic competitiveness will further improve in years to
come as ZET technology improves (see Exhibit 6).
Exhibit 6: Capital, operational, and total ownership cost of MDT for regional haul from Delhi to Jaipur in a mature production scenario
2022 2024 2026 2028 2030
Diesel
Electric
11
4
16
14
12
10
8
6
4
2
0
Electric
Diesel
INR/km
Capital cost difference of INR 31 lakhOperational cost savings of INR 7/km Total cost of ownership will be lower
Electric
46 lakh
Diesel
15 lakh
2
Electric MDTs for regional haul — Yielding operational savings of over ₹74 lakh over the
vehicle’s lifetime, with a payback period of 6.4 years
TRANSFORMING TRUCKING IN INDIA | 19 Diesel
Electric
38
20
0
5
10
15
20
25
30
35
40
INR/km
Electric
Diesel
2022 2024 2026 2028 2030
Capital cost diference of INR 94 lakhOperational cost savings of INR 18/km Total cost of ownership at parity by 2024
Electric 
1.3 crore
Diesel 
35 lakh
A 31-tonne electric HDT with a larger battery of 470 kWh costs 3.7 times the cost of its diesel counterpart. Operational cost savings are expected
to be ₹18/km (see Exhibit 7), making it far more affordable to operate than a conventional diesel truck. Though there is a high capital cost
difference, the operational saving are significant and by 2024 electric HDTs will be at parity with their diesel counterparts. Moreover, due to high
operational savings of 1.3 crore over the vehicle’s lifetime, a fleet operator will be able to pay back the differential upfront capital of 95 lakhs in
10.7 years.
Exhibit 7: Capital, operational, and total ownership cost of a HDT for regional haul from Delhi to Jaipur in a mature production scenario
3
Electric HDTs for regional haul — Generating operational savings of over ₹1.3 crore over the
vehicle’s lifetime, with a payback period of 10.7 years
TRANSFORMING TRUCKING IN INDIA | 20 2022 2024 2026 2028 2030
Electric
Diesel
Capital cost diference of INR 2 croreOperational cost savings of INR 9/km 
Diesel
Electric
34
25
Total cost of ownership at parity by 2027
20
44
60
b
80
b
30
b
E0
b
c
INR/km
Electric 
2.3 crore
Diesel 
35 lakh
The upfront capital cost of a 31-tonne electric HDT with 1,050 kWh battery is 6.6 times more than the diesel HDT.
i
While the cost of operating a
diesel HDT from Delhi to Mumbai is ₹34/km, it is only ₹25/km for an electric HDT. Considering operating savings of ₹9/km, the fleet operator can
save over ₹1.1 crore over the vehicle’s lifetime. Though electric HDT accrues significant operational cost savings, its TCO is 1.5 times higher than
its diesel counterpart today. However, with the development of the ZET market, the electric HDT could reach TCO parity with diesel HDT in 2027
(see Exhibit 8).
Exhibit 8: Capital, operational, and total ownership cost of a HDT travelling for long haul from Delhi to Mumbai in a mature production scenario
i.
A 1,050 kWh battery pack is not currently deployed in vehicles. However, each of the four use cases assumes that a vehicle can meet the duty cycle requirements of the given trucking application with a single charge.
Thus, a 1,050kWh battery was required to meet the duty cycle requirements of the long-haul trucking application assessed, and the associated costs of this size battery and truck were derived to accurately compare
diesel truck and ZET operations for long-haul trucking.
Electric HDTs for long haul — Leading to operational savings of nearly ₹1.1 crore over the
vehicle’s lifetime, with a payback period of 18.3 years
4
TRANSFORMING TRUCKING IN INDIA | 21 TCO parity is not the sole condition that freight operators will consider
when assessing the type of ZET vehicle to adopt, particularly for long-
haul trucking applications. A vehicles’ ability to meet operational
requirements will also be critical when operators consider ZET
adoption. For long-haul applications where it takes several days
to reach the trucks’ ending destinations, FCET trucks may be the
preferred technology pathway. These trucks would require fewer
stops along routes and can be re-fueled quickly—within minutes
compared to the long charge time required to charge a greater than
31-tonne truck via a 500 kW charger. Additionally, FCETs have a lower
gross vehicle weight given their smaller batteries, and this feature
may enable FCETs to better match the payload capacity of diesel
equivalents.
Fulfilling the duty cycle requirements of long-haul trucking
applications with BETs poses challenges. In today’s global market,
trucks do not have battery packs that meet the trucking demands of
long-haul duty cycle in a single charge. Additionally, a high-powered
charger is required to time-effectively charge a vehicle, leading to
substantial infrastructure and refueling costs for BET operators.
Battery degradation is also a concern, especially when the required
battery pack is greater than 500 kWh. Given the operating constraints
of BETs in long-haul trucking applications, FCETs may emerge as
the preferred truck type when operators need to travel prolonged
distances with minimal downtime.
ZETs can reduce both air pollution and costs while enhancing industrial
competitiveness, benefiting the citizens and the India economy.
ECONOMIC ANALYSIS | 35
TRANSFORMING TRUCKING IN INDIA | 22 Exhibit 9: The impact of each ZET on the road
9.6 million ZETs on 
the ground
2.8 gigatonnes of CO
2 
emissions  reductions
Equivalent to 46 billion 
trees planted
750 thousand tonnes of 
PM  emissions 
reductions  24.5 million tonnes of NOx 
emissions reductions 
PM savings (kg)  NOx savings (kg)  Vehicle 
Oil expenditu re
reductions (lakh INR) 
0.9575184
 CO

 savings (tonnes)  
1
1.59983192
3.7102163753
5.5152235594
Case
Case
Case
Case
CUMULATIVE IMPACT BY 2050 
TRANSFORMING TRUCKING IN INDIA | 23 Key Findings
TRANSFORMING TRUCKING IN INDIA | 24 The cost of logistics as a share of GDP is roughly 14% in India, which
is comparatively higher than peer nations where this metric is in the
range of 8%–11%. Transportation costs are a major driver (62%) of
overall logistics costs and fuel costs account for the overwhelming
majority of these transportation costs (see Exhibit 10).
15
ZET
adoption can lower associated fuel costs by 46% over the vehicle's
lifetime, leading to a 17% savings in logistics costs. Logistic cost
reductions by reduction of transportation costs have the potential
to directly reduce the cost of end goods and commodities, creating
lasting benefits for consumers.
Exhibit 10: Fuel costs as a major driver of transportation and logistics
share of GDP
Logistics cost as a share of GDP
14%
Break-up of 
logistics costs
Break-up of 
trucking costs
Break-up of 
transportation costs
TransportationInventoryAdministration
62%34%4%
22%MDTs & HDTs, 78%
Fuel, 77%
Others, 
23%
Other modes
1
ZETs can lead to sustained logistics cost
savings.
Exhibit 11: Annual Domestic battery demand in a high ZET adoption
scenario
2050 
500 GWh
2040 
150 GWh
2030
10 GWh
ZETs would be a significant source of demand for domestically
produced batteries, supporting and underpinning the National
Energy Storage Mission and the Production Linked Incentive Scheme
for Advanced Chemistry Cell Batteries. By 2050, up to 4,000 GWh of
cumulative battery demand could be created by ZETs alone (see
Exhibit 11), creating substantial demand for India to become a low-
cost and low-carbon manufacturing hub.
2
A robust domestic ZET market can
transform India into a global green hub
for battery manufacturing.
TRANSFORMING TRUCKING IN INDIA | 25 Estimated total cost of ownership for MDTs under a mature production scenario will be cheaper
than diesel; parity could be reached for HDTs by 2027.
Currently, ZETs have a higher upfront cost than diesel trucks and are not widely manufactured or available in India. The cost difference can be
around 2x for MDTs to ~6x for HDTs (Exhibit 12). HDTs in particular, have a higher upfront cost difference as longer distances and heavier loads
require a much larger battery pack, and batteries count for ~40% to 70% of electric HDT purchasing price. By leveraging currently available
technologies, however, ZETs could also have significantly lower per-kilometre operating costs. Under a mature production scenario, the resulting
TCO for ZETs is 12% –16% cheaper than MDT diesel trucks, and for heavy-duty trucking applications, ZETs can feasibly reach TCO parity by 2027.
This will result in payback periods of 5.2–6.4 years for MDTs and 10.7–18.3 years for HDTs, but these operational cost savings will remain out of
reach without decisive market creation and policy action.
Exhibit 12: The upfront cost of ZETs vs. diesel across
four use case scenarios
Exhibit 13: The vehicle operating cost of ZETs vs. diesel
trucks across scenarios
40
35
30
25
20
15
10
5
0
INR/km 
4035
21INR
4035






INR (Lakh)
0
50
100
150
200
250
4035
21INR
4035






3
TRANSFORMING TRUCKING IN INDIA | 26 INR/km 
MDT Short Diesel
MDT Regional DieselMDT Regional Electric
MDT Short Electric
2022 2024 2026 2028 2030
20
18
16
14
12
10
8
6
4
2
0
2022 2024 2026 2028 2030
INR/km 
HDT Regional Diesel
HDT Long haul Diesel
HDT Regional Electric
HDT Long haul Electric
50
45
40
35
30
25
20
15
10
5
0
Exhibit 14: TCO of ZET vs. diesel for MDTs under a mature production Exhibit 15: TCO of ZET vs. diesel for HDTs under a mature production
TRANSFORMING TRUCKING IN INDIA | 27
scenario scenario With supportive policies ZETs can achieve an 85% sales penetration
Based on global market momentum seen already, the existence of supportive polices, and an experienced private sector to drive ZET cost
competitiveness in India, the majority of trucks sold in 2050 — nearly 9 in 10 trucks — can feasibly be ZETs. Achieving a 100% sales penetration
level for MDTs and a 75% sales penetration rate for HDTs by 2050 would lead to an 85% overall sales penetration level for trucks. This level of
sales penetration would help transform the trucking sector and by 2050, 57% of truck stock would be ZETs.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2022 2024 2026 2028 2030 2032 2034 20362038 2040 2042 2044 2046 2048 2050
ZET sales penetration 
Number of ZETs sold (millions)  
MDTs
HDTs
ZET sales penetration rate
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
Exhibit 16: Projected number of ZETs in India
4
TRANSFORMING TRUCKING IN INDIA | 28 ZETs can help shift India off oil import dependency, supporting the vision of
an Aatmanirbhar Bharat.
Today, road freight accounts for more than 25% of annual oil import expenditures and is expected to grow over 4x by 2050 (see Exhibit 17). ZET
adoption in any time frame leads to sustained fuel savings and a significant reduction in oil imports, but a more intentional and rapid transition
can boost savings and strengthen India’s energy security. ZET adoption can reduce oil spend by 838 billion litres of diesel cumulatively by 2050.
This will result in ₹116 lakh crore of reduced oil expenditures by 2050 (see Exhibit 18).
Exhibit 17: Crude oil import expenditures for diesel production under
business as usual
0
10
20
30
40
50
60
70
80
90
2022 2025 2030 2035 2040 2045 2050
4x Demand
Oil improt (billion USD) 
Fuel cost reductions
High ZET adoption scenario
Busi
ness as 
u
sual
0
10
20
30
40
50
60
2022 2025 2030 2035 2040 2045 2050
Fuel costs (lakh crore INR)
Exhibit 18: Diesel fuel costs in a business-as-usual vs.
high ZET adoption scenario
5
TRANSFORMING TRUCKING IN INDIA | 29 Widespread ZET adoption could reduce
cumulative trucking particulate matter
(PM) and nitrous oxide (NOx) pollution
~40% by 2050, substantially improving
air quality.
The trucking sector currently contributes to a disproportionate
number of transport-related criteria emissions. Today, trucks
represent just 3% of the total vehicle fleet (including both passenger
and freight) yet are responsible for a staggering 53% of PM emissions
(see Exhibit 19).
16
In 2021 alone, MDTs and HDTs were responsible for
emitting around 1.6 million tonnes of NOx and 53,000 tonnes of PM
emissions.
Despite the Government of India’s push towards reducing criteria
pollutants through the implementation of stricter emission standards,
such as Bharat Stage VI, NOx and PM emissions through 2050 are
expected to increase under a business-as-usual scenario. While the
PM and NOx emissions factors of individual trucks will decline with
the implementation of the stricter standards, the growth in trucking
demand will supersede this decline. The adoption of ZETs is the best
long-term solution to reduce air pollution from the trucking sector.
Exhibit 19: Trucking as a portion of vehicle stock vs.
contributions to PM emissions and CO2 emissions
Trucks
Other Vehicles
Share of 
trucks in total 
vehicle stock
Share of emissions from trucks in 
total transport related 
3%
PM 
Emissions
53%
CO
2
 
Emissions
34%
6
TRANSFORMING TRUCKING IN INDIA | 30 A purposeful transition to ZETs can lead to considerable improvements in air quality and benefit public health, given that ZETs emit zero tailpipe
emissions. Achieving an 85% ZET sales penetration by 2050 would lead to a reduction of 750 thousand tonnes of PM and 24.5 million tonnes of
NOx emissions through 2050, reductions of roughly 40% (see Exhibit 20 and 21).
Exhibit 20: NOx emissions from diesel business-as-usual vs.
high ZET adoption scenario
44% reduction
2020 2025 2030 2035 2040 2045 2050
Emission reductions tonnes (million) 
Business as usual
High ZET adoption scenario
8
7
6
5
4
3
2
1
0
39% reduction
2020 2025 2030 2035 2040 2045 2050
Emission reductions tonnes (thousands) 
Business as usual
High ZET adoption scenario
300
250
200
150
100
50
0
Exhibit 21: PM emissions from diesel business-as-usual
vs. high ZET adoption scenario
TRANSFORMING TRUCKING IN INDIA | 31 The trucking sector is responsible for one-third of transport-related
CO2 emissions in India. If India’s trucking sector stays on its current
trajectory, trucks will be responsible for annual CO2 emissions of 800
million tonnes by 2050, with HDTs accounting for over 50% of the
share. In India, widespread ZET adoption could reduce CO2 emissions
by 46% by 2050, totaling 2.8–3.8 gigatonnes of cumulative CO2 savings
today through 2050 (see Exhibit 22).
Exhibit 22: CO2 emissions reductions in diesel business as usual vs.
high ZET adoption scenario
900
800
700
600
500
400
300
200
100
0
2022 2025 2035 2040 2045 2050
Emission r eductions
2030
High ZET adoption scenario
Business as usual
CO
2
 emissions (million tonnes)
7
Similarly, widespread ZET adoption could reduce associated trucking carbon emissions 46%
annually by 2050, lowering the nation’s greenhouse gas (GHG) emissions.
TRANSFORMING TRUCKING IN INDIA | 32 Exhibit 23: Interconnected actions to drive irreversible ZET market growth
The benefits of the ZET transition are clear and profound, yet they will not unfold naturally or without decisive intervention. To capture the
benefits of ZETs, a concerted and coordinated effort across stakeholder groups is required to harmonise ZET demand and supply and to drive
market scale. Left unchecked, a range of policy, infrastructure, and market barriers will prevent India from fulfilling the vast potential of trucking
electrification. Without dedicated efforts, fleet operators cannot simply or efficiently convert their fleets into zero-emissions vehicles, which
currently carry higher upfront capex costs compared with diesel trucks. Lack of charging infrastructure and unavailability of ZET models hinder
high-speed adoption.
Yet with innovative policy, technology, infrastructure, and finance strategies, public-private partners can help India unlock opportunity and seize
value in the transition, from connecting fleet operators and manufacturers with policy and finance solutions, to supporting critical emissions-
reduction and energy security goals.
Driving Irreversible ZET Market Growth
Infrastructure 
development 
Policies that help 
drive first-mover 
ZET adoption 
Scaled 
manufacturing 
investment and 
greater ZET supply 
ZET financing to 
scale growth
8
The early state of the overall ZET market in India requires a coordinated ecosystem approach
spanning the public and private sectors.
TRANSFORMING TRUCKING IN INDIA | 33 Box 1: Scaling ambition to reach net-zero 2070 targets in the trucking sector
Under a more ambitious scenario that aligns with India's net zero 2070 goal, the trucking sector will be on track to achieve a 100% ZET sale
penetration by 2050. Achieving this target in the trucking sector is entirely possible. By leveraging policies, financing, and domestic R&D
investments, India can become a zero-emissions trucking hub.
By achieving 100% ZET sales penetration, 3.8 gigatonnes of carbon emissions can be eliminated from the trucking sector — an additional
gigatonne compared to the high ZET adoption scenario shown in exhibit 24. Reaching a 100% sales penetration level can also yield additional air
quality improvements, lowering PM emissions by 57% (1 million tonnes) and NOx emissions by 59% (30.9 million tonnes).
Exhibit 24: Impact of 100% ZET sales penetration
30.9 million tonnes of NOx
 
Emissions Reductions
3.8 gigatonnes of CO
 
1 million t onnes of PM
 100% ZET sales 
penetration by 2050
TRANSFORMING TRUCKING IN INDIA | 34 Solutions
TRANSFORMING TRUCKING IN INDIA | 35 How can policy interventions support demand- and supply-side market dynamics to help industry players manage risk, reduce costs,
and seed the nascent ZET market?
What role should R&D investment play in ensuring technology and manufacturing is equipped to support a ZET model with the right
mix of duty cycles and trucking options?
What potential pathways exist for Indian leaders to ramp up charging infrastructure, from cost reduction and grid infrastructure
development to reliable load management?
How can financing strategy alleviate risk, improve access to credit, and ultimately help vital ecosystem participants finance their
own business transition to ZETs, including original equipment manufacturers (OEMs), charging infrastructure providers, and fleet
operators?
ZET adoption presents significant economic, public health, industrial competitiveness, and emissions-saving opportunities for India. Yet, seizing
those opportunities will require new solutions and coordination across the market ecosystem. The far-reaching benefits of a ZET future are
within reach for India, with concerted, near-term market creation and policy action. From fostering supply and demand to investing in targeted
charging infrastructure, India’s leaders have an actionable toolset available now to help scale ZET adoption across the country.
The following section explores key questions that many public- and private-sector leaders may have about ZET solutions, including:
1.
2.
3.
4.
Overcome barriers to mass ZET adoption with policy, technology, charging, and financing pathways
TRANSFORMING TRUCKING IN INDIA | 36 Box 2: Targeted investments and policy interventions to achieve TCO parity
The total cost of BET ownership can improve significantly as economies of scale improve. The TCO numbers outlined in the economics section
earlier depicts how TCO parity is achieved when ZET production reaches economies of scale and there is optimised charging infrastructure
utilisation. To reach economies of scale in a short period of time, targeted investments and regulatory measures that incentivise and encourage
ZET manufacturing capabilities will be critical to drive down the cost of ZETs and reach TCO superiority sooner.
Scaled manufacturing
To overcome this nascency period and improve ZET manufacturing capacity, private and public investments are needed to begin ZET production
and increase production volume to achieve economies of scale. The market cannot effectively grow without vehicle supply. Supply-side policies
like sales targets can provide traditional OEMs incentive to innovate and encourage startups to enter the market. Supply-side policies have been
the most effective regulatory tool used globally and have been the driving force behind sustained ZET adoption in the United States and Europe.
A three-pronged strategy is required for ZETs to reach TCO parity in the HDT sector:
1. Encourage manufacturers to increase ZET production, reducing per-unit costs through larger production runs.
2. Increase domestic battery production and reduce battery prices to achieve parity with the global market average price.
3. Increasing charger utilisation or subsidise public charging infrastructure development until achieving economies of scale.
TRANSFORMING TRUCKING IN INDIA | 37 Exhibit 25 depicts how these three tools can coalesce to continue to drive down costs until ZETs reach TCO superiority. This chart captures
how improvements in vehicle production and battery manufacturing and increasing charger utilisation can further drive down the TCO of
ZETs. The TCO of electric HDTs will remain high until ZET domestic production capacity is scaled. It also depicts the impact of mature market
production and outlines how economies of scale can lead to near cost parity with diesel counterparts across all trucking use-case applications.
Economies of scale can bring down the costs of the truck by an additional 20% due to production efficiencies. Dedicated investments to achieve
high volume battery production can lower the cost of batteries in India from $220/kwh today to the global average price of $125/kwh.
17
And,
Increasing infrastructure depot and end-route utilisation by 20% can lead to lower infrastructure costs resulting in near ZET TCO parity with
diesel vehicles within HDT long-interstate use cases — the hardest sector to electrify.
Government investment to seed the nascent market can enable OEMs and charging infrastructure providers to increase production capacities.
Failure to achieve economies of scale efficiently will lead to ZETs having a higher purchase price than equivalent diesel vehicles for years to come
and will require prolonged government subsidy to incentivise ZET production. Targeted investments to help weather ZET technology’s nascent
period can drive production scale. Once market entrants overcome the R&D stage, their businesses can become self-sustaining, given ZETs
potential for performance, economic, and environmental benefits. As vehicle costs decline and charger utilisation grows, the government will be
able to withdraw support, and natural market forces will lead to ZETs growing in market share.
Exhibit 25: The effect of scaled production and improved charging infrastructure utilisation on HDT long-haul total cost of ownership
Mature Production: added costs that would be present in the absence 
of dedicated production facilities and with low charging utilisation 
0
10
20
30
40
50
60
TCO (INR/km)
Enhanced Economies of Scale: additional cost 
savings from scaled vehicle and battery 
production and optimised charging utilisation 
Immature ZET 
Manufacturing
Impact of Mature 
Production
Impact of Enhanced 
Economies of Scale 
Diesel 
Truck
Insurance cost
Taxes & fees & registration
Vehicle purchase cost
Infrastructure cost
Battery replacement cost
Added costs with a lack of 
scaled manufacturing and 
charging utilisation
TRANSFORMING TRUCKING IN INDIA | 38 1.
Policy Interventions
Expanding current electric vehicle (EV)
policies while shaping new demand-
and supply-side policies will accelerate
the road to truck electrification
POLICY
TRANSFORMING TRUCKING IN INDIA | 39 Mapping out today’s policy landscape, with a ZET lens
Exhibit 26: Overview of existing policy landscape
India has already made meaningful progress fostering passenger EV adoption, creating opportunities to adapt existing policies as frameworks to
support ZET adoption. For example, vehicle electrification policies, charging standards, and fuel standards have all helped spur the light-duty EV
market in several ways, including reducing upfront costs of EVs and infrastructure, providing tax waivers, and establishing targets and non-fiscal
incentives to spur market growth.
Broadening the scope of these current EV policies to include trucks while also introducing ZET-specific policies will be critical to speeding market
growth and can motivate industry players to step up their own efforts by helping mitigate investment risks and reduce manufacturing costs.
POLICY DESCRIPTION
National-level EV
policies
India's National Electric Mobility Mission marked the beginning of the nation's EV transition. Since then, FAME and FAME
II have effectively promoted EV adoption by providing demand incentives for EVs and establishing a network of charging
infrastructure. Several other initiatives such as the exemption of registration fees on EVs, the Go Electric campaign, and
the Shoonya Campaign actively support the EV ecosystem in India.
Emission standards
Bharat Stage VI (BS VI) emissions standards are designed to improve air quality by reducing tailpipe emissions such as
PM and NOx. The BS VI standards require trucks to emit 63% fewer PM emissions (g/km) and 88% fewer NOx emissions
(g/km) than the former BS IV emission norms.
Initiatives to promote
manufacturing
India has launched a series of initiatives to promote entrepreneurship and industrial development to ensure national
companies and manufacturers remain globally competitive. For instance the Aatmanirbhar Bharat (Self-Reliant India)
Campaign sets a vision for India to become self-reliant and enhance its domestic manufacturing capabilities and exports.
Initiatives to improve
logistics efficiency
India is working to reduce logistics costs as a share of GDP from 14% to less than 10% by 2022. This includes development of
road highway infrastructure, multi-modal logistics parks, dedicated freight corridors and warehousing infrastructure.
Incentives on battery
manufacturing
The National Programme on Advanced Chemistry Cell (ACC) Battery Storage is designed to improve India's battery
manufacturing capabilities and catalyse battery and ZET manufacturing. Additionally, the PLI Scheme for Automobile
and Auto Components Industry provides incentives to enhance India's manufacturing capabilities for advanced
automotive components and battery electric and hydrogen fuel cell vehicles.
TRANSFORMING TRUCKING IN INDIA | 40 The launch of India’s national- and state-level EV policies has
introduced a wide range of fiscal and non-fiscal incentives and targets
for manufacturing and adoption of EVs and associated charging
infrastructure. To date, these policies and schemes have helped
accelerate EV market growth and strengthened fuel security — but
their focus is primarily limited to two-, three-, and four-wheelers
and buses. While these policies do not specifically mention MDT and
HDT electrification, they do provide a framework for policymakers
to expand existing programs or craft similar initiatives to foster ZET
manufacturing and adoption in India.
India has already set fuel-economy and emissions standards for
trucks, which will evolve over time, and the Bureau of Energy
Efficiency currently requires trucks to improve their fuel consumption
(km/litre) incrementally.
18
Recently, Bharat Stage VI Standards were
also implemented to regulate vehicular emissions of air pollutants.
As India continues to strengthen its vehicle emissions standards,
manufacturers may find it more cost-effective to manufacture ZETs
instead of investing in costly equipment to comply with vehicle
emissions regulations. Gradually adopting more-stringent efficiency
and emissions standards in this way can encourage manufacturers to
transition towards ZET production.
With regards to FCETs, India has also started building the hydrogen
ecosystem at the right time by laying the foundation stone with
National Hydrogen Mission. In line with the mission, Green Hydrogen
Policy was launched to help stimulate green hydrogen production for
decarbonisation of hard-to-abate sectors.
19
India can leverage this
existing momentum around green hydrogen, and draw learnings from
global pilots to devise its plan to support FCET infrastructure.
POLICY DESCRIPTION
Sub-national actions
and initiatives on
ZETs
States are committing to broader ZET deployment. Telangana has endorsed the Drive to Zero Campaign and has agreed
to a Memorandum of Understanding with other global actors to have 100% of new truck sales be zero-emission vehicles
by 2040. Additionally, the Maharashtra EV policy establishes a target to make four key highways fully EV-ready by 2025
and outlines how these corridors would have charging infrastructure suitable for long-haul electric truck transport.
In addition, eighteen states or union territories have established EV policies to promote the electrification of urban
transportation.
TRANSFORMING TRUCKING IN INDIA | 41 Close-up on demand- and supply-side policy
Expanding existing EV policies to trucks and creating more-specific
demand- and supply-side policies can catalyse the ZET market and set
the sector on the pathway to high electrification. These policies can be
designed to boost the demand and supply of both BETs as well as FCETs.
Demand-side policies to increase consumer demand
Incentives, subsidies, tax exemptions, rebates, and adoption targets
can all help seed the nascent market and accelerate fleet operators’
transition to ZETs. The policies outlined below can help bring down
the upfront cost and ultimately increase the uptake of ZETs:
yPurchase subsidies can help bring down the upfront cost of
ZETs to unlock their TCO advantage for more adopters. Extending
existing incentives or creating all-new schemes for MDTs and HDTs
can help spur adoption and lower the purchase price for fleet
operators looking to adopt ZETs.
yFeebates can incentivise ZETs with rebates, while
disincentivising diesel trucks with fees.
This self-financing
scheme does not work like taxes that add to government revenue.
Instead, fees from diesel vehicle sales go towards funding ZET
rebates. Fees are defined based on their fuel emissions, calculated
in litres/km. Imposing additional fuel cess, pollution cess, and road
tax can also fund feebates schemes and help disincentivise diesel.
yInterest subvention can alleviate high ZET interest rates to
propel adoption. Interest rates for ZET purchases are currently
high due to the perceived business and market risk associated
with this nascent market. National or state government and other
public-sector undertakings can help remove this market barrier by
subsidising part of the interest rate on ZETs — an approach that has
often proven effective in bringing down monthly payments as well
as interest rates for purchasing ZETs.
yFleet purchase requirements can establish a fleet electrification
timeline for commercial freight operators. The purchase
requirements can be incremental, and over time the government
can require that an increasing percentage of medium- and heavy-
duty vehicle fleets are electric. This program can encourage ZET
adoption by fleet aggregators.
yScrappage policy and incentives can help eliminate high-
emitting, old, and unfit trucks from India’s roads.
The existing
national Vehicle Scrapping Policy mandates scrappage of
commercial vehicles, including trucks older than 15 years if they
fail to pass the fitness test. Per the policy, a consumer is provided
a scrap value on de-registration of an old vehicle, and an upfront
discount and motor vehicle tax rebate on purchase of any new
vehicle.
20
Effective implementation of such a policy for freight
trucks can act as an incentive for fleet operators to buy new ZETs.
Moreover, the government can provide additional scrappage
incentives for buying ZETs on submission of scrappage certificate.
21
yZero-emissions zones (ZEZs) provide unrestricted access to
zero- or low-emissions vehicles and restrict polluting vehicle
use. A demarcated zone could be as large as a few streets or even
an entire city (e.g., Rotterdam).
22
Whatever the size, these zones
incentivise ZETs by easing traffic conditions, and in turn encourage
fleet operators to incorporate more ZETs into their fleets in order to
meet their delivery demand within these jurisdictions.
yWaiving entry restrictions for ZETs.
Several Indian cities restrict
truck travel during specific hours of the day. Waiving these restrictions
could provide an additional incentive and operational advantage for
ZETs, thereby improving the business case for shifting to ZETs.
TRANSFORMING TRUCKING IN INDIA | 42 Supply-side policies to encourage traditional OEMs to
innovate and startups to enter ZET manufacturing

Clearly defined targets and goals set by the government can send
market signals while boosting ZET manufacturing and deployment
efforts. Implementing emissions standards can also disincentivise
the sale of inefficient trucks. Each of the policies outlined below can
encourage ZET manufacturing and help OEMs achieve economies of
scale for ZET production.
yZET credit schemes ensure a certain percentage of an OEM’s
new truck sales are zero emitting. To earn credit, OEMs must sell
a certain number of ZETs or purchase credits to fulfil the quota from
a ZET manufacturer, which can be increased over time. If an OEM
sells more than the policy requires, then they may trade excess
credits, incentivising first adopters and new market entrants alike
by providing an opportunity to earn revenue.
yZET targets send a market signal that the government is
committed to electrifying the trucking sector.
Such policies
galvanise OEMs to set production targets to achieve specific
adoption timelines. Several countries/states including Austria,
California, Cape Verde, and more have already established their
own ZET targets (see Box 4).
23
yFuel efficiency (FE) norms reward OEMs manufacturing
vehicles with low emissions, while penalising those with
high emissions. Fuel standards can be designed as a regulatory
standard or take a market-based approach. Thus far, India has
taken a regulatory approach, implementing fuel consumption
standards for commercial vehicles. Continuing to strengthen fuel
consumption standards can spur market innovation and nudge
manufacturers to shift to ZETs. For instance, some fuel standards
have been designed as a cap-and-trade program to limit the
emissions of fuels, and reward OEMs who overachieve targets by
allowing them to sell their extra credits, creating an additional
revenue stream. India’s market-based Perform Achieve Trade
(PAT) scheme involves a similar market mechanism for exchanging
credits (EScerts) across high-emitting industries and has already
successfully reduced emissions in regulated industries.
TRANSFORMING TRUCKING IN INDIA | 43 Public-private collaboration is key to the effective implementation of any of these outlined schemes. The Indian government and its strategic
partners should engage with the private sector to understand on-the-ground challenges, gain different perspectives on the impact of any
potential policy, and ultimately co-design mechanisms that enable these actors to overcome market barriers and build a sustained demand
and supply of ZETs. Throughout, streamlined logistical processes and clear coordination across state and national government bodies will be
critical to smooth operationalisation. For instance, the successful adoption of Bharat Stage VI and the FAME II schemes stemmed directly from
coordinated private engagement and public awareness initiatives, as well as sustained policy implementation and monitoring. A similar spirit of
public-private partnership can support implementation of demand and supply policies for ZETs in India.
Exhibit 27: Examples of supply- and demand-side policies to facilitate ZET growth
Demand-side 
policies
Purchase 
incentives
FeebatesProcurement 
incentives
Scrappage 
policies
Interest 
subvention 
schemes
Supply-side 
policies
Awareness 
programs
ZET credit
ZET targets
Fuel 
eficiency 
norms
Green 
freight 
programs
TRANSFORMING TRUCKING IN INDIA | 44 From concept to practice: Policy leadership in other major economies
Box 3: California Charges Ahead on a ZET Sales
Requirement
In California, the world’s fifth-largest economy, emissions from the
transportation sector represent over 50% of the state’s total carbon
emissions. In order to meet 2030 climate targets, state leaders have
adopted a series of targets to transition to zero-emissions passenger
and freight vehicles — and made California the first jurisdiction to
enact zero-emissions freight vehicle sales requirements.
24

In June 2020, the California Air and Resources Board (CARB) adopted
the Advanced Clean Trucks (ACT) regulation, a sales requirement for
manufacturers to sell an increasing percentage of ZETs. The enacted
sales mandate is divided into three vehicle groups, each with differing
sales penetration requirements. By 2035, 55% of new class 2b–3
(3.8–6.3 tonnes) pickup trucks and vans, 75% of class 4–8 (6.3 tonnes
and above) rigid trucks, and 40% of class 7–8 (11.7 tonnes and above)
tractor truck sales are required to be zero-emissions vehicles. The
state has devised an accounting process to track credit compliance.
Manufacturers accrue deficits based on the number of vehicles
sold within California, beginning with the model year 2024, and
the number of vehicles sold is then multiplied by the percent sales
requirement and a weight class modifier. Each manufacturer must
incur credits by selling vehicles that meet California’s standards for
emissions criteria to offset their accrued deficits.
25

Moreover, CARB has developed Advanced Clean Fleets regulation
that promotes the demand of ZETs, as California plans to enact
complementary rules to drive demand. The state is currently
deliberating on zero-emissions fleet requirements for drayage trucks
and commercial fleet vehicles.
26
This policy would spur the demand
and reassure manufacturers that there will be sustained demand for
ZETs. The implications of the ACT regulation and advanced clean fleet
electrification regulations will likely have national, even global, effects
as truck manufacturers cater to the new rule. Given California’s global
market share, this progressive policy will help increase the number
of ZET models offered in the global supply chain, helping spur the
transition to ZETs well beyond California’s borders.
TRANSFORMING TRUCKING IN INDIA | 45 Box 4: Global momentum to ZET adoption
Countries across the globe are using policy mechanisms to help
stimulate a ZET market shift. Several countries have introduced ZET
targets (Exhibit 28) and/or strengthened or adopted new policies and
mandates to seed the market and incentivise OEMs to manufacture
ZETs. Policymakers and industry leaders are also beginning to explore
opportunities to spur ZET development to remain competitive in
global supply chains.
27
Technology advancements, carbon-reduction
targets, and policy schemes aiming to reduce trucking-related
emissions have initiated the shift to ZETs in locations from California
to Cape Verde, and many in between.
Exhibit 28: Countries/states with targets aimed at accelerating ZET
manufacturing and demand
28
The European Union initiated a CO2 corporate standard, and OEMs
will need to meet fleet-wide average CO2 emissions standards to be
compliant. The policy targets a 15% reduction in CO2 emissions for
MDT and HDT fleets by 2025 and a 30% reduction in average fleet CO2
emissions by 2030. The UK recently announced that it will ban the sale
of diesel trucks in the country beyond 2040 and all new trucks sold
will be zero-emissions based.
29

As part of the international Drive to Zero Campaign, Austria, Canada,
Chile, Germany, Greece, the Netherlands, Norway, and Sweden all
signed a memorandum of understanding (MoU) in May 2021 to foster
leadership and international coordination to accelerate ZET adoption.
The MoU aims to ramp up ambition towards 100% ZET adoption
before 2050, foster collaboration, and send a clear market signal to
investors and manufacturers.
30
COUNTRY/STATETARGET
Austria
100% of newly registered HDTs less than 18
tonnes by 2030, and 100% of those weighing
more than 18 tonnes by 2035
California 100% of MDT/HDT by 2045
Cape Verde 100% of new MDT/HDT by 2035
Norway 50% of new MDT/HDT by 2030
TRANSFORMING TRUCKING IN INDIA | 46 2.
Charging Solutions
A menu of versatile charging options
is available now — along with clear
pathways to implementation
TRANSFORMING TRUCKING IN INDIA | 47 Achieving widespread charging infrastructure is crucial to enabling ZET adoption. Fleet operators, governments, electricity distribution
companies (DISCOMs), and charging infrastructure providers must establish short- and long-term strategies for assessing and addressing
charging infrastructure needs. Infrastructure, particularly at depots and along freight corridors, is required to electrify long-haul and regional-
haul freight applications. The first step is to understand the array of charging solutions available to India’s trucking leaders today.
Today’s charging strategies
Providing the right mix of charging strategies and types of chargers is critical for enabling ZETs to travel a range of distances and for charging
infrastructure providers to maximise charging station utilisation. Fleet operators will also need to consider how any potential charging
strategy aligns with dwell times, business operations, and vehicle model types. For example, a fleet operator that has already made significant
investments in warehouses, truck yards, and depots may benefit form a different charging approach than companies that do not operate on a
return-to-base model.
TRANSFORMING TRUCKING IN INDIA | 48 CHARGING STRATEGY DESCRIPTIONBENEFITDRAWBACK
Plug-in Charging
Depot charging
Charging occurs at an operator’s
hub, such as a truck yard or
warehouse. These privately
owned chargers typically charge
overnight when a fleet is not
operating.
ySupports overnight charging
and can align with existing
fleet operating schedules.
yUsers will pay less on a per-
charge basis.
yFleet operator will be
responsible for deploying
charging assets, including
hardware, electrical, and soft
costs.
yAccess to dedicated depots
might only be available to
larger fleet operators, whose
market share is much lower
compared to owner-operator
trucks.
En-route charging
Chargers are located along
commonly traveled corridors to
enable fleets to top off a depleted
battery. These chargers could
be public charging or battery
swapping assets, and should offer
high-capacity, high-speed charge
to reduce downtime.
yEnables ZETs to travel longer
distances.
yUsers need not make a capital
investment in charging
infrastructure; instead, they
can pay per charge.
yThe driver will need to wait
with the truck to charge, and
en-route charging times will
likely affect driving schedules.
yThe costs of a single-vehicle
charge may be more expensive
than depot charging.
Exhibit 29: Charging Strategy
31
TRANSFORMING TRUCKING IN INDIA | 49 CHARGING STRATEGY DESCRIPTIONBENEFITDRAWBACK
Battery Swapping
Battery swapping
Instead of using a plug-in
charger, drivers trade out
batteries for fully charged
replacements at conveniently
located swapping stations.
yIt takes far less time to swap
a battery than to charge a
depleted one.
yThe time it takes to swap a
battery is comparable to diesel
truck refueling times.
yDiffering battery-pack
configurations could lead to
additional costs.
yThis solution requires significant
capital outlay to cover extra
batteries and stations that can
service large ZET batteries.
In-Motion Battery Charging
Catenary charging
Electrical lines help charge
trucks while they are en-route.
Charging can take place via
overhead wires, embedded
wireless power transfer systems,
or underground power tracks.
yBatteries recharge while the
truck is in motion, eliminating
charging downtime.
yZET batteries could be much
smaller.
yBuilding overhead electrical
charging involves substantial
capital and maintenance
expenditure.
yTrucks would only be able to
travel along routes with overhead
charging infrastructure.
Inductive charging
32
Also called dynamic charging,
this method uses coils installed
under the asphalt. These
coils transfer energy through
electromagnetic induction to
provide electricity to charge a
small truck battery.
yRequires smaller truck batteries
as the truck is recharged during
route.
yEliminates the need for plug-
in charging and waiting to
recharge.
yRequires major roadway
infrastructure maintenance.
yIs capital-intensive and any
maintenance associated with
the coils would require road
cutting.
TRANSFORMING TRUCKING IN INDIA | 50 Given that plug-in charging is a mature technology, existing
infrastructure is already underway to facilitate EV charging. Therefore
a likely scenario is that fleets will utilise a mixture of plug-in depot
charging and en-route fast charging.
yDepot charging will give fleets a secure location to charge vehicles
overnight. Lower power depot chargers will allow fleet operators to
manage their charging costs, and as such these chargers will likely
provide the bulk of daily charging in regional and urban duty cycles.
yEn-route fast charging will enable ZETs to travel farther during the
day, enabling the electrification of more trucking applications.
Since the dwell time for en-route charging is limited, powerful fast
chargers will be better suited for en-route charging.
However, en-route charging means ZET operators pay a higher energy
price, as charging operators need to charge a cost premium to recoup
the cost of deploying fast chargers. Fleet operators will likely choose
to maximise depot charging when possible. Yet in many instances, this
will not be possible, such as when a truck is not returning to a depot
base or when operators do not own the land they park on overnight.
These conditions lend themselves to a greater reliance on en-route
charging.
The exhibit below estimates the number of chargers to meet the
demands of BETs in India through 2050. From 2030 to 2040, the uptake
of electric MDTs is expected to be greater given the operating patterns
of these vehicles as well as their favorable economics. By 2040, even
more rapid uptake of electric HDTs is expected as charging technology
will have also likely evolved, and charger utilisation increased.
Thus, the uptick in electric HDTs will require few chargers, but these
chargers will have a higher power capacity of 150 Kw and greater.
Exhibit 30: Total charging units required
Chargers (millions) 
HDT en-route
HDT depot
MDT en-route
MDT depot
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2022 2025 2030 2035 2040 2045 2050
TRANSFORMING TRUCKING IN INDIA | 51 Box 5: How battery size affects charging needs
Given the size of ZET batteries, a Level 2 or moderate-power charger is likely the smallest charger feasible for MDT charging. A Level 2 charger,
which operates at 208–240 volts/22 kw and uses a three-phase current to deliver AC charge to batteries, will likely be common for depot
charging.
33
HDTs require a higher capacity charger at a minimum DC charger with 50 kW.
For en-route fast charging, a direct current fast charger (DCFC) is forecasted as the best option. DCFC chargers currently operate at 415
volts/50–500 kW and deliver DC charge. However, research and development on megawatt (MW) charging is currently under way and will likely
become available in several years.
34
Already in the United States, for example, Portland General Electric and Daimler Trucks have installed
a public fast-charging station for HDVs with a power level of 1 MW.
35
As the technology evolves, fast charging can play a key role in en-route
charging to minimise charging times. However, the most economical charging will continue to be lower power capacity charging as it will require
significantly less investment in electrical infrastructure.
Cumulative annual charging infrastructure investment costs are
projected to reach approximatley 3,000 crore by 2030 and 1.2 lakh
crore by 2050. Infrastructure investment accounts for hardware,
installation, and maintenance costs over a unit’s lifespan. These costs
do not include land, construction, or grid infrastructure costs, which
vary considerably based on local conditions.
The bottom line: Different businesses will have different demands
for charging, and no one charger or charging utilisation strategy will
fit every use case. The deployment of private depot vs. 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 that
understand and meet those needs.
Exhibit 31: Cost of chargers and electricity to power 2050 EV stock vs.
the cost of diesel to fuel equivalent vehicle stock
INR (lakh crore)
25
20
15
10
5
0
ZET “refueling” Diesel truck refueling
Electricity/Diesel fuel costCharging infrastructure costs
TRANSFORMING TRUCKING IN INDIA | 52 Pathways to delivering a widespread charging network
Strategic cost management is essential to promoting infrastructure development for the urgent transition to ZETs. Typically, the cost to charge
BEVs includes hardware, maintenance, electrical, site, and soft costs as shown in Exhibit 32. Each of these components can be managed
strategically to reduce the overall cost of charging.
Exhibit 32: Components of charging cost
Hardware costs
Cost of the physical 
charger and 
equipmentSof costs
Permitting and 
opportunity costs 
associated with time 
and resources spent on 
infrastructure 
deployment
Maintenance and 
electricity costs
Fees for electricity and 
charging infrastructure 
maintenance
Site assessment and 
installation costs
Costs of evaluating on-site 
power capacity and boring 
and trenching requirements 
to wire and connect the 
charger to the electric 
meter
Electrical costs
Costs of upgrading 
electrical infrastructure to 
ensure adequate power 
capacity for ZET charging
TRANSFORMING TRUCKING IN INDIA | 53 Charging costs vary widely based on factors like the hardware itself (i.e., the size of the charger and its power capacity rating) as well as on
operational costs like the cost of electricity and maintenance. For example, hardware costs for purchase and installation of a 22 kWAC charger are
roughly ₹0.75 lakh, whereas the cost of a 150 kWDC fast charger can be upwards of ₹18 lakh. Many of the larger 300 kW and 500 kW chargers have
yet to be deployed in India and will be more expensive to purchase and install. Land costs are also critical to consider.
As part of the 2022 Union budget, the Indian government announced plans to increase funding for charging infrastructure. The government
has also encouraged private players to develop innovative business models to increase the availability of charging. Business models that help
distribute the cost of charging infrastructure development and incentives to promote early market entrants to deploy charging infrastructure
along highways and business models which distribute the cost of charging infrastructure development can help increase charging availability.
The table below provides a list of interventions that can decrease overall charging costs:
Pathway 1 Leveraging policy intervention to reduce charging costs
TRANSFORMING TRUCKING IN INDIA | 54 Exhibit 33: Interventions to encourage innovative business models for charging infrastructure
INTERVENTIONDESCRIPTION
Removing demand charges
for ZET charging
Specific tariffs that remove demand charges in the near term for ZET charging can reduce the total electricity
cost of charging while ZET uptake increases.
EV tariffs
National and State Governments can introduce a special EV tariff that would offer lower electricity prices for charging
electric trucks.
Concessional land
Government can provide public land for the installation and operation of charger at bare minimum lease rentals.
They can also consider providing public land on a revenue-sharing model, wherein the concessionaire pays a pre-
determined share of electricity sold to the government agency.
Enact time-of-use (ToU) or
time-of-day (ToD) tariffs
A ToU or ToD tariff for charging could incentivise vehicle charging during off-peak hours — times of day that
typically see lower energy demand coupled with high renewable energy generation. Such a tariff structure can
be a more effective mechanism for DISCOMs to minimise peak loads, manage costs, and reduce the need for
additional distribution capacity.
Subscription-based charging
models
Subscription models offer drivers the opportunity to pay one flat (typically monthly) fee to charge their vehicles.
This model may be useful for trucking fleet operators that do not want pay the upfront costs for depot chargers
and want a means to manage variable charging rates. This type of model can also help charge point operators
better manage their revenue flow and can be a means to increase charging availability.
Public Private Partnerships
to fund charging
infrastructure
Public Private Partnership (PPP) models offer a promising solution to fund the deployment of charging
infrastructure. Under such a scheme, both the public and private sector could bear some of the upfront
investment cost for charging infrastructure development.
The table below provides a list of interventions that can decrease overall charging costs:
TRANSFORMING TRUCKING IN INDIA | 55 Box 6: Battery swapping for heavy-duty trucks in China
TRANSFORMING TRUCKING IN INDIA | 56
Battery swapping technology provides an alternative strategy to
charging electric vehicles. It allows EV operators to swap their battery
near the end of its state of charge with a new battery at battery
swapping stations. China has witnessed a growing momentum of
battery swappable HDTs over the past two years.
Sales of battery swappable HDTs in China reached close to 5,000 by
the first half of 2022, rising from just 600 in 2020. Moreover, these
battery swappable HDTs represented half of the zero-emissions trucks
sold in China in the first half of 2022. This astonishing growth can be
attributed to the following factors:
yFaster recharging times: Battery swapping allows the fleet
operators to recharge their ZETs quickly (in less than 6 minutes),
reducing operational delays and lost revenue from the time spent
charging the truck otherwise.
Note: 2022 figures are from Jan–Jun 2022
Exhibit 34: Number and share of battery swappable HDTs sold in China
36
24%
40%
48%
0%
10%
20%
30%
40%
50%
60%
2020 2021 2022
% share
Battery swappable HDTs
% of battery swappable HDTs as a share of total ZE HDTs
0
1,000
2,000
3,000
4,000
5,000
6,000
Sales
yLower upfront cost commitment: A battery swappable truck is sold
without a battery, which can reduce the purchase price by 37.5%,
allowing fleet operators with better financing options to procure
the vehicle.
37
yShifted responsibility of battery ownership to swapping operator:
The battery is the single most expensive cost element of a ZET.
With the swapping model, the onus of battery maintenance and
operation is passed on to the swapping operator.
yPolicy support: The central government in China has allowed
battery swappable EVs to be eligible for subsidies. Moreover, local
governments such as the Jiangsu province is in the process of
standardising batteries for the swapping use case.
38
Most of China’s battery swappable HDTs are deployed in closed-loop
systems like industrial parks and ports — where trucks run short
distances on specific, predictable routes multiple times a day. This
allows swapping operators to accurately size the battery stock and
increase station utilisation, eventually reducing costs and maximising
revenue.
Drawing from the experience in China, battery swapping is most
effective for HDTs running on a shorter route with multiple trips. India
can look to explore the battery swapping technology through pilots
in the near term for specific use cases like port or mining operations
to test the feasibility of the technology and eventually scale based on
the learnings from the pilot. In the future, with the decreasing costs for
vehicle batteries and the increasing commercial viability of ultra-fast
charging stations, a combination of charging and swapping can be
explored. As more ZETs come into the market, evaluating the distribution
and transmission capacity of the grid will be a prerequisite for mass
electrification. If India achieves an 86% ZET sales penetration in the
MDT and HDT segments by 2050, the energy demand from charging
the BET stock in 2030 is estimated to be 8.8 terawatt-hours (TWh). By
2050, the energy required for charging MDTs and HDTs could reach
as high as 531 terawatt-hours (TWh). This level of energy demand
requires investment in generation, transmission, and distribution to
ensure power and current can be supplied to satisfy truck charging.
A charging station that draws power from the grid will need to relate
to the broader electrical infrastructure network. HDT and MDT
mobility requires more power than EV passenger transport and is
more on par with e-bus needs. While charging can be managed to
reduce the strain on local distribution grids as charging demand
increases, electrical infrastructure investments will be needed when
the sanctioned load does not meet the charging demand. Investment
in upstream electrical infrastructure — such as converting single-
phase to three-phase power, installing additional transformers, and
re-cabling — is crucial to ensuring smooth charging operations. India
is already building interstate bus electric vehicle supply equipment
(EVSE), which ecosystem actors could consider planning in concert
with HDT infrastructure to help facilitate reliable power supply for all
transport needs.
Pathway 2 Strategically build adequate power infrastructure
Exhibit 35: How the charger fits with the broader grid network and potential reasons for upgrades
Power generation sources
Higher power
distribution network
Substation
Transformer
Local distribution grid
EV chargers
Additional generation and storage capacity to meet charging 
demand during peak periods
Augmentation for en-route charging in remote areas
Additional substation to meet the increasing power demand
Additional transformers to avoid overload and outages
Upgrade from single-phase to three-phase power 
supply for high-voltage chargers
Source: World Bank
39

TRANSFORMING TRUCKING IN INDIA | 57 Granular data on load availability, grid congestion, and capacity constraints will enable charging infrastructure providers, fleet operators, and DISCOMs
alike to make more informed decisions regarding electrical infrastructure investments and charging station development. By projecting future power
demand and performing grid analysis, DISCOMs can recommend sites for fleet operators that already have grid capacity. The table below provides
specific recommendations that DISCOMs, governments, and fleet aggregators can adopt to prepare for and minimise electrical infrastructure costs.
Exhibit 36: Interventions to reduce the electrical infrastructure costs of charging infrastructure deployment
INTERVENTIONDESCRIPTION
Load assessments
Publicly available analysis on load availability by DISCOMs can enable charging infrastructure providers and fleet
operators to select charging sites with higher sanctioned loads and minimise electrical infrastructure investment.
Extending the Integrated
Power Development
Scheme
Through initiatives like the Integrated Power Development Scheme, the Ministry of Power can provide funding for cities to
plan for electrical infrastructure growth. With dedicated funding, DISCOMs will be able to more accurately forecast where
ZET charging could cause grid congestion and where power draws may exceed the sanctioned load capacity.
40

Dedicated funding for
infrastructure buildout
By extending FAME II incentives or introducing new fiscal incentives, the government can help defray upstream
electrical infrastructure costs.
A utility-ready
infrastructure scheme
A concerted effort can be made to ensure DISCOMs follow Ministry of Power guidelines for revamping the distribution
sector to deploy electrical infrastructure up to the meter. Under a utility-ready infrastructure scheme, DISCOMs would be
responsible for maintaining and updating all electrical infrastructure except for the meter. To help DISCOMs pay for these
upgrades, state governments or the Ministry of Power could offer grants and financial incentives to DISCOMs. Incentives can
also be allocated explicitly for electrical augmentation along highly travelled corridors and within commercial districts.
Energy storage
investments
A build-out of high-capacity energy storage can enable India to meet the growing demand for charging with as much
renewable energy as possible, and with fewer grid investments. Increasing electricity demand together with falling
battery prices will make storage technologies more economically viable and can help pave the way for even greater
renewable penetration.
41
Demand-side
management schemes
Managed charging utilises infrastructure assets to optimise the grid by controlling time, power draw, and charging
duration to align with times of day when excess grid capacity is available. Under such a scheme, fleet operators
and public charging providers could opt into the program to receive preferential electricity rates when they charge
their vehicle during off-peak periods. The implementation of smart charging can enable participation in demand
response or time-of-use tariff programs. Additionally, installing chargers that can provide reactive power support
while pulling real power heavily from the grid can help with grid stability.
TRANSFORMING TRUCKING IN INDIA | 58 Fleet operators must strategically plan infrastructure deployment to reduce capital hardware costs. Sizing infrastructure around vehicle dwell
time, ensuring high utilisation of every installed charger, and ensuring interoperability between chargers will all increase demand for charging
infrastructure and in turn reduce costs.
Considering future demand growth for fleets and associated charging can enhance infrastructure planning. For instance, to determine whether
a site will be suitable for charging, an electrical evaluation is likely needed to assess current capacity and determine whether upgrades are
needed. It may be necessary to upgrade electrical panels and wiring to ensure adequate current capacity — key factors in effective infrastructure
planning.
Exhibit 37: Strategies for charging infrastructure buildout
Fleet aggregators can size 
charging demand by 
planning charging times 
around vehicle dwell 
times and duty cycles. 
Maximising the utilisation 
of charging assets will 
enable fleets to reduce 
the number of chargers 
installed and the 
sanctioned load required 
at a given site.
Placing a charging station 
near critical electrical 
infrastructure equipment 
such as the electrical 
panel and transformers 
can help reduce wiring 
and labour costs 
associated with 
installation.
Fleet aggregators, can 
size charging demand by 
planning charging times 
around vehicle dwell 
times and duty cycles. 
Develop a strategy to 
right-size charging 
infrastructure
Maximising charging 
utilisation 
Assess sites for 
electrical capacity
Ensure standardisation 
of chargers 
TRANSFORMING TRUCKING IN INDIA | 59 Soft costs comprise of process costs, permitting costs, and opportunity
costs associated with charging infrastructure development. Given
the power demand that electric MDT and HDT charging will require,
sites might have to execute a new or updated electricity connection
agreement with their local DISCOM. The time and logistical process of
executing a connection agreement can significantly delay a charging
infrastructure project. If additional grid upgrades are required, further
correspondence with DISCOMs and municipal departments can add
costs and delays. Additionally, charging infrastructure providers and
fleet operators need to consider the amount of time and money it will
take to secure permits for procuring or leasing the land to develop
charging infrastructure.
To minimise soft costs, DISCOMs should develop more transparent
processes and proactive communications that include notifying fleet
operators and infrastructure providers of the status of interconnection
applications. Streamlining the interconnection process will help fleet
operators and charging infrastructure providers reduce overall costs
as well as become more efficient in their capital planning.
42
Providing
customers with a single-window process to procure and install
charging stations will also reduce processing time and cost. User-
friendly online platforms will enable customers to submit a request
for load assessment, and ultimately help streamline the process for
installing electrical infrastructure.
Pathway 3 Streamline infrastructure installation process to reduce soft costs
TRANSFORMING TRUCKING IN INDIA | 60 3.
Technology and
Manufacturing
Positioning India as a ZET leader with
enhanced vehicle performance and
production solutions
TRANSFORMING TRUCKING IN INDIA | 61 To emerge as a global leader in zero-emissions trucking, India should
expand its pursuit of innovative technology, localised manufacturing,
and a resilient ZET supply chain ecosystem in the following high-level
ways:
yImprove battery chemistry, energy density, and fuel cell efficiency
to increase the range of electric trucks.
yEnhance performance characteristics such as payload capacity to
ensure ZETs across the board are at parity with diesel counterparts.
yFoster a domestic manufacturing strategy to help build a robust
supply chain of ZETs, in turn helping fulfil India’s long-term trucking
demands.
Overall, by purposefully advancing ZET technology, India can drive
ZET performance improvements and manufacturing capabilities,
eventually bringing cost reductions, too.
Vehicle Performance: Boosting range, payload, and efficiency
Technology innovation is needed to ensure that ZETs’ performance
characteristics — specifically vehicle range and payload capacity —
equal that of their diesel counterparts. Only then will operators have
the confidence to transition fully to ZET fleets.
TRANSFORMING TRUCKING IN INDIA | 62 Range: ZET trucks must be able to travel longer distances. Improved range performance will require technological investments in battery
energy density (i.e., the energy potential stored in a battery relative to its weight). The past decade has seen significant improvements in battery
technology, with automakers shifting from lead-acid to high-density lithium-ion (Li-ion) batteries boasting six times higher density.
43
In the next
decade, the energy density of Li-ion batteries is expected to improve by an additional 63%.
Additionally, further advancements are being made in alternative battery chemistries. For example, solid-state batteries are at an early
development stage but may facilitate higher energy density. Using solid electrolyte materials also offers enhanced safety and thermal stability.
44

Given the advantages of this next-generation battery technology, several OEMs (e.g., viz., Daimler, Toyota, and Ford) are already undertaking R&D
and testing. More recently, Daimler deployed electric buses with solid-state batteries in Germany.
45

Improvements in vehicle efficiency can also improve range performance, from investing in more aerodynamic body shapes and designs to
reduce drag and the energy required for propulsion, to lowering tire-rolling resistance and light-weighting vehicles.
46

Payload: The weight of batteries in BETs can compromise a truck’s payload capacity by nearly 13%. Reducing battery weight leads directly to
increased payload capacity, particularly in the HDT segment. Additionally, other light-weighting techniques such as reducing the tractor, trailer,
and axle suspension system and frame weight and removing diesel engine components can recoup the "lost" payload.
47

Charge time: The time a truck spends charging is time spent off the road. Minimising charging time is critical to enabling ZETs to compete
against, and ideally outperform, diesel counterparts. To expedite charging in general, onboard charging systems need to be able to handle
higher currents. Battery chemistry will also play a major role in bringing trucks greater ramp rates and charge efficiency. India can further
research and invest in adaptive fast charging and thermal management to accommodate fast charging, reduce the deterioration of batteries, and
increase battery life.
48
Such advancements can increase vehicle range and improve the operational viability of India’s long-haul ZET segment.
Manufacturing: India’s ZET transition demands the domestic manufacturing of ZET models designed for a range of duty cycles. The country
is indeed primed to meet growing trucking demand with ZETs, considering its well-established automotive and manufacturing sector and
exemplary leadership from logistics and vehicle manufacturing firms currently supporting a strong passenger and light-duty-freight EV
ecosystem. Similar engagements from industry actors coupled with India’s strong domestic manufacturing capacity can enable India to fully
transition to ZETs. Lastly, creating economies of scale in ZET production will drive down costs and inefficiencies.
TRANSFORMING TRUCKING IN INDIA | 63 Box 7: The state of India’s trucking market today
The trucking sector in India is currently composed of differing vehicle use cases, truck types, and payload requirements. MDTs have historically
dominated the Indian trucking market, but within the past several years, there has been an increase in HDT demand. From 2014 to 2021, the
market share of HDTs grew from 42% to 63%.
49
This trend is consistent with the global trucking market — as countries become more developed
and wages increase, road networks improve, and the share of loads carried by MDTs declines while HDTs loads increase.
50
The growth of hub-
and-spoke networks — a delivery network that connects every location through a single intermediary location — coupled with the need for cost
reductions can also contribute to the increasing share of heavier trucks.
The supply side of the trucking market in India is highly consolidated. This consolidation presents opportunities for scale but can also lead to
specific players having an outsized influence on technology advancement within the sector. Three OEMs — Tata Motors, Ashok Leyland, and
Volvo-Eicher — have 88% of the market share (Exhibit 38).
51

Exhibit 38: Market share of MDT and HDT by OEM in 2021
Benefits of
 consolidated market
Tata Motors Ashok Leyland
VE Commercial Others
51%
23%
14%12%
Experienced 
manufacturers can create 
momentum and scale 
new technologies. They 
can leverage industry 
and supply chain 
expertise and harness 
eficiencies in the 
production processes to 
drive down costs.
Such a strong market 
presence can sometimes 
put leading players at an 
undue advantage where 
they have a strong 
influence on technology 
and policy advancement, 
potentially creating a 
barrier to entry for other 
newer players.
Benefits of 
consolidated market
TRANSFORMING TRUCKING IN INDIA | 64 While ZET manufacturing is in a nascent stage, some models are
available today. The models currently in production domestically
in India are Tata Ultra T.7 Electric (MDT) and Rhino 5536 IPLT by
Infraprime Logistics (HDT).
52
Additionally, several organisations have
begun converting diesel trucks to electric drive trains, and retrofitted
electric MDT trucks are expected to hit Indian roads this year. While
there are no FCETs manufactured domestically, prototype FCET trucks
have been deployed globally, and it is expected that HDT FCET trucks
in particular may gain market traction.
Bringing today’s market momentum and ingenuity to
tomorrow’s supply chain
India has a proven track record when it comes to scaling EV
manufacturing and is also already a global leader in electric two-
wheeler manufacturing due to its extensive network of local suppliers
of raw material and components, advanced logistics system and
distribution network, and integration of suppliers using unique
information technology.
Targeted technology and strategy advancements in the following
areas can help inform a similar scaled investment in ZET
manufacturing capabilities:
Local supply chain: Developing localised ZET manufacturing and
supply chains is an opportunity for India to serve both domestic
and global trucking markets. Local manufacturing and robust
supply chains will bring opportunity to both existing and emerging
businesses, and drive economic expansion with new green jobs across
the value chain. Local manufacturing can also help minimise the
geopolitical risks associated with imported components’ availability
and price volatility. Moreover, the development of the local supply
chain will also enhance the cost-competitiveness of ZETs.
Battery and Component manufacturing: For a vehicle to be eligible
for the FAME II purchasing incentives, it must have domestically
manufactured EV components such as the body panel, traction motor,
and battery.
53
However, due to the dearth of raw material availability,
insufficient technological expertise, and lower cost of imported
components, India’s battery localisation for electric cars stands at
20%. For some components like motor and power electronics, it
is below 10%.
54
Dedicated investments are necessary to develop
and deploy advanced technology and local manufacturing of ZET
components.
Currently, key battery chemistries used in the FAME-approved models
are lithium iron phosphate (LIP), lithium nickel manganese cobalt
(LNMC), and lithium nickel cobalt aluminum (LCNA).
55
But overly
relying on lithium-ion batteries can lead to an overdependence
on domestic exports. Meanwhile import dependence for minerals
like lithium and cobalt will also lead to supply chain risks. Further
investment in alternative battery development will enable India to
realise a stronger, more self-sufficient battery supply chain.
Battery recycling programs: Advancing recycling techniques can
enhance efficiency in mineral recovery, promote the circularity of
minerals in the economy, and help reduce import dependence to
mitigate geopolitical risk.
56

TRANSFORMING TRUCKING IN INDIA | 65 Box 8: Application of fuel cell technology to the trucking market
Fuel cell electric trucks (FCETs) use hydrogen as a fuel to produce electricity used to power an electric motor and the wheels of the vehicle. FCETs
are primarily in the prototype and early demonstration stage globally. FCETs have a key role to play in India’s transport sector, particularly for
long-haul applications that are difficult to electrify today from a battery range standpoint.
The most significant impediment to the commercial adoption of FCETs is the high total cost of ownership compared with other technology
options such as BETs. Before hydrogen can be used as a fuel, it must first be produced, stored, and transported to the refueling stations, just like
conventional trucks that fill up at the diesel pump today. Different considerations and strategies across the entire hydrogen value chain will be
critical for cost reductions and in helping FCETs achieve market maturity.
Exhibit 39: Flow of hydrogen from production to end use for FCETs
ProductionStorageStorageTrasnport
Refuling
Infrastructure Station
Fuel Cell Electric Truck
Hydrogen RefulingHydrogen End Use
Hydrogen Supply
TRANSFORMING TRUCKING IN INDIA | 66 Hydrogen supply considerations
While hydrogen can be produced in a variety of ways, to ensure FCETs
contribute to zero emissions, hydrogen used for fueling should be
green hydrogen (i.e., produced via electrolysis powered by renewable
energy or thermochemical water splitting). Given the abundance
of domestic renewable energy, India is well-positioned to be a
competitive producer of green hydrogen in the near future, but it will
require large-scale investment in green hydrogen production to drive
down costs.
One potential production pathway is producing hydrogen off site,
storing it, and then transporting it over longer distances. This can
be advantageous because hydrogen can be produced in areas with
rich renewable resources in large capacities, enabling scale and
higher efficiency, leading to lower unit costs. The second pathway
involves utilising regional production clusters where the hydrogen
off-take could be shared among different end-uses, for example,
key industrial clusters with rich renewable resources and significant
trucking activity. Hydrogen would still need to be stored but would
not need to be transported over long distances. This pathway will be
most economical when large-scale hydrogen demand exists within a
particular regional cluster.
Similar to other fuels, hydrogen must be transported from its
production site to refueling stations for use, adding substantial costs
to the production process, especially if produced off site. Hydrogen
has a low volumetric energy density and must be condensed to be
moved economically. Once condensed, hydrogen can be transported
via maritime ships, rail, pipes, or trucks.
57
The most economical
solution will likely be pipeline transportation with final mile delivery
completed by trucks.
Hydrogen must be stored after production and again once it is
transported to the refueling station. Currently, hydrogen is the most
economical when stored in its gaseous state in pressurised canisters
and in small volumes on-site. India should undertake studies and
invest in storage methods that require less equipment and space to
reduce the cost of hydrogen storage.
FCET refueling infrastructure considerations
The stations include expensive equipment ranging from compressors,
storage vessels, and dispensers, adding to the overall cost of owning
and operating an FCET.
58
Maximising hydrogen refueling station
utilisation will be one of the best short-term solutions to reduce these
costs. Trucking operators and hydrogen refueling station providers
need to consider where FCET trucks will need to refuel and how much
fuel they require to operate their fleets to ensure stations are placed in
optimal locations. These stations should be sized in proportion to the
FCET fleet serviced.
FCET technology and operational considerations
The fuel cell propulsion system is one of the main cost drivers
of FCETs. Investing in scaled production can lead to significant
manufacturing advancements and reduce the upfront costs of FCETs.
Additionally, efficiency improvements can lead to operational cost
reductions.
For FCETs to have a viable pathway for scaled growth, India must
pursue mainstream research and production activities in hydrogen
supply, refueling, and fuel cell propulsion. Initial progress is underway
with the launch of the National Hydrogen Mission.
59

TRANSFORMING TRUCKING IN INDIA | 67 Exhibit 40: Measures to drive innovation and supply chain development in India
Recognising the need to accelerate technology innovation and supply chain development for ZETs, India can provide funding for research and
development (R&D), enable public-private partnership, facilitate technology transfer and collaboration, and invest in skill-building to help electrify the
nation’s truck sector at the speed and scale needed to address both the geo-economic opportunity, and climate urgency (Exhibit 40):
FINANCING
R&D AND
MANUFACTURING
yGovernment grants to support R&D can facilitate technology breakthroughs.
yProduction-linked incentives, discounted loans, and subsidised lands can reduce investment
requirements for new or retrofitted truck manufacturing units.
yGovernment financing can accelerate development of prototypes, running pilots, and
commercialising ZETs.
ENABLING
PUBLIC-PRIVATE
PARTNERSHIP
(PPP)
yCohesive efforts by government and industry can enable research and technology development.
yPublic-private partnerships can reduce the risk borne by either party and encourage innovation and
the scaling of new technologies.
yGovernment agencies can partner with truck manufacturers and corporates in piloting ZETs.
KNOWLEDGE
SHARING AND
COLLABORATION
yGlobal OEMs such as BYD, Volvo, and Daimler are testing and developing components and charging
technologies to serve ZETs.
yForming a consortium to share knowledge and experiences with ZET technology to promote
collaboration between global and national OEMs can spur the ZET ecosystem in India.
TRAINING
AND SKILL
DEVELOPMENT
ySkill-building and training of potential researchers and workforce can enable advanced research in
ZET and associate components.
yStrengthening industrial training institutes (ITIs) and government universities can facilitate creation
of skilled workforce for manufacturing, assembly, and recycling ZETs.
yUpgrading existing curriculums and creating new courses can equip students and researchers with
more tools to undertake R&D and manufacture ZETs.
LEVERAGING
EXISTING
INFRASTRUCTURE
yThe existing supply chain of electric LDVs and passenger vehicles can be leveraged, transferred, and
forged into new and heavier applications to support ZET manufacturing.
yChargers set to be deployed under the FAME scheme can also be targeted to serve ZETs.
yUpcoming liquefied natural gas (LNG) stations can be transformed to serve long-haul FCETs.
TRANSFORMING TRUCKING IN INDIA | 68 4.
Financing and
Business Models
Overcoming market barriers to
mobilise ZET finance
TRANSFORMING TRUCKING IN INDIA | 69 Lack of financing is one of the critical barriers to EV adoption.
EV capital costs, including for ZETs, are much higher than diesel
counterparts. At the same time, the interest rate offered on loans
for EVs is much higher than diesel vehicles. The loan-to-value ratios
are low and loan terms are short. Innovative financing schemes and
business models to operate ZETs can catalyse the market and spur
deployment by helping would-be ZET fleet operators overcome
upfront capex hurdles and access ZETs’ superior opex and total cost of
ownership.
Trucking market overview: Dominated by smaller
companies and perceived credit risk
The demand for goods and freight movement in India is not
centralised. While there are a few tier-one hubs like Delhi and Mumbai,
tier-two and -three cities comprise nearly 60% of the country’s total
demand for goods and freight traffic volume.
60
Drivers also prefer to
travel along routes where they are familiar with the local language
and road network. Limited regulation and a low barrier to entry
have led to a crowded market with many small fleet operators and
unskilled drivers — in fact, over 75% of the freight market is made up
of small owner-operators who own fewer than five commercial goods
carriers.
61

This disproportionate amount of smaller regional aggregators creates
a high degree of fragmentation, resulting in unsustainably low returns.
Those low returns and high competitive pressures make the small
carriers unattractive to creditors because their businesses face high
risk. At the same time, those price pressures can lead to behavior
such as overloading — which larger, more compliant companies
cannot engage in — precluding consolidation. As a result, only small
operators can survive, but they often lack access to the information,
capital, or level of sophistication it takes to fully invest in modern
trucking technologies.
Revenue uncertainty in the market raises even further the credit risk
associated with a borrowing owner-operator, which means that most
new freight vehicles are financed through non-banking financial
companies (NBFCs). These companies are less risk-averse than banks
but charge higher interest rates. The loans stand at an average interest
rate of between 12% and 16%, tenures of three to four years, and loan-
to-value ratios often exceeding 80%, altogether driving the market
towards low-cost business models seeking to minimise upfront
costs.
62
Barriers to growth of ZET financing, from purchase to
production
The critical role of financing in the trucking system makes it an
important consideration in growing the penetration of ZETs.
This is exemplified on the purchasing side by the fact that buying an
MDT ZET costs two to three times more than a similar-sized diesel
vehicle, and an HDT ZET costs four to seven times more than a diesel
HDT.
63
This relatively high upfront cost presents a significant barrier
for already capital-constrained small fleet operators. Without access
to affordable financing, it will be difficult for most operators to
modernise their fleets.
Lending institutions may consider ZET financing to be higher risk than
conventional truck financing, because ZETs involve introducing a much
more expensive asset, and one with less certain residual value, into a
market where financing even a less-expensive, more-familiar asset is
already a risky proposition. If they offer any loan product at all, financing
institutions typically offer only high interest rates, short loan tenures,
and low loan-to-value ratios in order to hedge against two primary
categories of perceived risk: 1) asset risks that are related to the value
of the asset underlying the loan, and 2) business model risks that are
related to the ability to generate sufficient revenue to service the loan.
TRANSFORMING TRUCKING IN INDIA | 70
yAsset risks stem from the lack of performance history and the nascent nature of the vehicle. While EV technology is rapidly evolving, lenders
and vehicle operators have persistent concerns over ZET durability, range, supportive policy, and infrastructure. Furthermore, there is no
established residual value of a ZET (as few if any have reached end of life), which compounds risk for lender and borrower alike. And with no
established secondary market for EVs, ZETs, or batteries, the inability to predict how these markets will evolve only compounds uncertainty.
Finally, technology developments within the coming years could dramatically improve ZETs and further deteriorate the value of older electric
trucks — adding to the overall complexity of determining the residual value of battery and vehicle assets.
yBusiness model risks also affect bankability. There are operational concerns as well as market pressures, given that the entire road freight
ecosystem was built to accommodate diesel vehicles. Considering ZETs are a new asset class, lenders and operators are uncertain about ZETs’
ability to meet the demands of freight delivery. Lenders are wary that operators will be unable to generate enough revenue to pay off their loans,
given the need to manage charging schedules, train staff, and restructure operations to accommodate the benefits and limitations of ZETs.
Exhibit 41: Key barriers with ZET finance
Customer risks also compound lenders’ hesitancy to finance trucks. A high upfront cost corresponds to higher equated monthly instalments
(EMIs), which may be even more difficult for operators to afford. In the instance of default, the lender would then be liable to cover the loss.
Lenders subsequently use high-interest rates and shorter loan tenure to counterbalance customer risk, often even requiring additional collateral.
Hence, smaller fleet operators may find it difficult to secure favorable loan terms to upgrade to ZETs.
Business Model Risk
Systemic Financing Characteristic
Limited Financing 
Options
Resale Risk
Infrastructure Risk
Technology Risk
Resale RiskAsset Risk
Maintenance 
Risk
Loan Customer Risk 
Operation Risk
Performance 
Risk
High 
Interest Rate
Low 
Loan-to-Value Ratio
High
Insurance Rate
TRANSFORMING TRUCKING IN INDIA | 71 Opportunities to mobilise finance: How government actors, industry leaders, and financiers can
advance ZET financing and utilise innovative business models
Financing schemes and business models explicitly designed to address asset and business model risks, distribute customer risk, and expand
access to credit can effectively spur ZET adoption. To help address financial risks and extend access to credit, government leaders, lenders, and
industry actors can all play a role in managing risks and expanding access to finance. Below are a series of measures that different actors can
take to mobilise finance for ZETs:
Government at different levels can accelerate the ZET transition by working to enact policies that, individually, help mobilise finance, and
incrementally, help provide a stable and market-encouraging policy environment for the foreseeable future. Following are a few key examples of
policy actions that will help pave the way for a ZET future in India:
National and state governments1
yStable policy environment: At the early stages, while the market
develops, policy provisions, incentive schemes, and clearly laid
out government commitments can help gain the trust of private
financiers in the new technologies.
yPublic-backed loans: Offering loans with more favorable terms
can be one way to help borrowers attain more affordable debt.
Using public finance at lower interest rates can help fleet operators
manage high interest rates. Already, several existing schemes at the
national and state level provide or facilitate financing for small road
transport operators — and could be pivoted to start prioritising
ZETs in a manner that creates awareness of and interest in the
technologies, offering preferential loans for them.
yInterest subvention schemes and risk-sharing mechanisms:
Discounts on interest rates of loans for buying ZETs can allow
financiers to develop a learning curve on the technology without
taking on high risk or delaying adoption. On the other hand,
dedicating loan reserves to provide guarantees for ZETs helps
distribute risks for lenders in case of loan default. In both cases,
the government facilitates funds. Multilateral and bilateral
development banks can also be brought in as funders of risk-
sharing facilities, with public sector banks acting as facility
managers. In lieu of dedicated schemes for interest subvention or
risk sharing (e.g., credit guarantees), governments can incorporate
ZETs into existing programs for enterprise owners and small road
transport operators.
TRANSFORMING TRUCKING IN INDIA | 72
yDemand aggregation: These schemes can facilitate larger EV
procurement contracts and minimise upfront costs. Currently,
demand for ZETs is sizable among e-commerce providers.
These businesses are heavily reliant upon third-party providers
transporting goods to customers. Aggregating demand for ZETs
can help create economies of scale for both manufacturing and
financing ZETs. Bulk procurement orders can also help create
economies of scale for financiers such that their learning curve on
ZETs is steeper, and their confidence in the technology develops
faster.
yMarket-based credit programs: Market-based mechanisms can
be used to put a price on emissions externalities. Such a tool
can be leveraged to create additional revenue streams for the
development of zero-emissions technologies. These schemes can
target different points of the supply chain, such as the production
of energy, production of the vehicle, or use of the vehicle.
TRANSFORMING TRUCKING IN INDIA | 73 ZETs are a new asset class and present a differing risk profile than diesel vehicles. Differing risk portfolios require tailored financing approaches.
To distribute the risk of ZET ownership, mechanisms need to transfer risk from purchaser to seller. Two primary mechanisms can achieve this 1)
leasing and 2) explicit risk acceptance by seller in forms of warranties and buyback guarantees.
yLease purchasing and as-a-service models: The decision to buy
a vehicle outright or lease a truck varies for each company and
largely depends on fleet size, anticipated duration of ownership,
and financing options. Leasing adds flexibility to the business
model and helps fleet operators increase vehicle utilisation. For
instance, the operator can initiate short- or long-term leases. Short-
term leases could be seasonal to meet peak demand periods.
Leasing also enables operators to lease vehicles for specific use
cases, strategically utilising vehicles based on delivery quotas and
routing.
Leasing a ZET eliminates the risk of unknown resale value, as the
lessee is not liable for reselling the asset.
64
It also leaves room
for purchased technology eventually reaching obsolescence in a
continuously innovating market, such that when newer models
arrive, leases may be transferred to another vehicle. Some leasing
schemes are all-inclusive and include financing, maintenance, and
in some cases, even insurance and operational staff. This type of
model reduces the upfront risk for the operator, as they no longer
need to invest in maintenance or staff training.
Volta Trucks and Volvo Trucks are both, for example, exploring
trucking-as-a-service models where a fixed monthly cost will give
customers access to trucks, charging infrastructure, insurance,
maintenance, and driver training.
65
Pay-per-mile leasing, wherein
the leasing payment is calculated based on the usage of the truck,
is currently being explored by Daimler. This could be an innovative
business model to ensure access to ZETs for small road operators
that cannot guarantee demand and do not wish to commit to
longer-term leases.
66
yBattery leasing or financing: Batteries represent 50% to 70% of
the cost of ZETs, and separating the battery from the overall price
makes the purchase of ZETs less capital intensive. The ZET and
battery can be financed separately so that the battery can remain a
liability for the OEM, and operators lease the battery from the OEM.
As under a battery-leasing scheme, the OEM is liable for battery
maintenance. This type of program reduces risk and upfront costs,
while yielding maintenance savings. Batteries may also be financed
separately, if needed. In the medium term, as other types of electric
vehicles become more mainstream to finance, batteries may also
be financed separately as they may become more lucrative due to
the possibility of resale and ability to be repurposed outside of the
application within the truck (e.g., as a backup for decentralised
renewable energy).
yPerformance guarantees and more robust warranties:
Performance guarantees are typically structured as an agreement
between the OEM and the financier; the OEM guarantees specific
performance characteristics and is liable for replacing the vehicle
or vehicle part if the ZET does not operate to specifications.
2.2 OEMs and fleet operators
TRANSFORMING TRUCKING IN INDIA | 74 Warranties primarily help the vehicle operator manage risks and
enable the operator to maintain and replace the battery or other
vehicle parts during the duration of the warranty period. Such
measures increase confidence and reduce buyer risk. However,
there will be a requirement on the OEM’s end to have the financial
health necessary to provide guarantees and warranties, should the
vehicle need to be replaced or maintained.
ySecondary market development: There is no established
secondary market for ZET assets or batteries, which adds to both
borrower and lender risk. However, this can be addressed if the
OEM can offer a buy-back guarantee. A buy-back guarantee by the
OEM would guarantee that the buyer can sell back the ZET at a
minimum resale price based on depreciation. Extending a similar
guarantee to lenders can reduce their risk. In the instance of
borrower default, the financier will have an established guarantee
from the OEM on a minimum resale price, thereby enabling the
financier to recoup at least a portion of their loss. Similar to a
performance guarantee, an OEM will need to ensure that its
balance sheet strength can lend credence to a buy-back agreement
with the borrower and be trusted by the financier.
TRANSFORMING TRUCKING IN INDIA | 75
yRobust depreciation criteria: Banks lack expertise in evaluating
the electric vehicle (EV) market and consequently price risk highly.
Banks need to invest in their capacity to better evaluate the ZET
and EV market to bridge the gap between perceived risk and actual
risk. Traditional financing models that use upfront cost and residual
value of diesel trucks to evaluate depreciation need to evolve for
ZETs. For ZETs currently, higher cost and unknown residual value
result in more rapid depreciation and higher financing costs.
67

As the financing market for EVs develops, however, the end-of-
life value of batteries may start to be determined and can be
incorporated for the case of electric trucks even if they are at a
nascent stage of adoption. Also, with global and national targets
around net-zero emissions and climate-aligned lending emerging
rapidly, financiers may increasingly consider the climate transition
risks of financing diesel trucks compared with ZETs. This would
reduce the difference in risk between financing diesel trucks and
ZETs. Given the long useful life of trucks in India, decisions taken
today to finance ZETs today may be vital in helping financiers
align to future industry standards on financed emissions even
past the decade, and help create an early learning curve that sets
financiers up for greater market share when ZET adoption picks
up. Developing this knowledge and capacity may additionally
help banks and NBFCs gain access to cheaper credit lines from
institutional financiers through sustainability-linked loans, green
bonds, and other similar financial instruments.
Lenders should invest in their research capabilities to adequately evaluate ZETs and gradually build trust in the technology. From there, lenders
can work on structuring more favorable financing for ZET loans by shaping a new mechanism to reduce counterparty risks.
yTailored loan products: Given high capital costs and high interest
rates, ZET financing requires significantly higher loan principal
compared with diesel truck loans. Yet current loan products do not
account for ZETs’ unique financial benefit of incurring operational
savings and thereby making EMI repayments easier to afford.
Offering ZET-favoring features like grace periods, higher loan-to-
value ratios, lower interest rates, and longer loan tenures can all
help borrowers secure and repay loans that better correspond
to TCO savings. To evaluate ZETs with more accuracy, and offer
more dedicated loan products, banks and NBFCs can leverage
partnerships with OEMs that could include third-party quality
assurance, financing pilots, and product guarantees. Creating a
synergy between borrowers, financiers, and manufacturers of ZETs
will translate to information symmetry on the real value and risk
associated with a truck, and prompt novel preferential financing
products.
In the near term, government policies like upfront subsidies, public-
backed loans, and interest subvention will catalyse the market and
encourage more OEMs and fleet operators to manufacture and
operate ZETs. Capitalising on the supportive policy ecosystem,
OEMs must step forward with leasing products with more attractive
guarantees and warranties. Finally, financiers must build out
institutional capabilities in the initial stages of adoption to provide
more attractive financing for early market entrants.
2.3 Financial institutions
TRANSFORMING TRUCKING IN INDIA | 76
yPartial loan guarantee: DFIs and multilaterals can increase
private sector lending for ZETs through guarantees. Under this type
of scheme, the multilateral or DFI agrees to cover a percentage of
the loan principal if there is a default enabling private lenders to
hedge against counterparty risk. This mechanism can help ZET
manufacturers and aggregators secure more favorable financing.
yConcessional financing: Concessional financing is below-market-
rate financing. Given the high cost of borrowing for nascent
technologies, concessional loans can be used to seed the nascent
market and attract more private sector investors.
yGreen bonds: To raise capital for ZET production, OEMs may be
able to leverage green bonds. Similar to traditional bonds, green
bonds are a debt financing instrument; however, they are allocated
explicitly for sustainable development projects.
India is well-positioned to leverage concessional financing from multilateral trust funds or development finance institutions (DFIs). A
considerable amount of funding by development institutions is set aside to promote innovation and sustainable energy breakthroughs, and
the deployment of ZETs aligns with these development objectives. Additionally, DFIs have played an instrumental role in raising capital for
India's power and rail sector. While these sectors are highly regulated, parallels can be drawn to mobilise similar capital flows to decarbonise the
automotive sector and provide funding for charging infrastructure development.
2.4 Development finance institutions and multilaterals
TRANSFORMING TRUCKING IN INDIA | 77 A blend of strategies can be used to moblise finance for ZETs and each stakeholder group can play a key role:
Exhibit 42: Opportunities to mobilise finance for ZETs
F
I
N
A
N
C
I
A
L
 
I
N
S
T
I
T
U
T
E
S
DEVELOPM
EN
T F I N
A
N
C
E
 IN
S
T
IT
U
T
IO
N
S
O
E
M
S
 
A
N
D
 
F
L
E
E
T
 
O
P
E
R
A
T
O
R
S
N
A
T
IO
N
A
L
 A
N
D
 S
T
A
T
E
 G
O
VERNMENT
(DFIs)
Catalyse the nascent
ZET market by
introducing policies
that encourage private
sector investment Develop business
models to scale market
development and
generate consumer
confidence
Collaborate with public
bodies to develop novel
financial tools
Provide capital for
emerging economies to
finance their
decarbonisation goals
yPublic-back loans
yInterest subventions schemes and
risk-sharing mechanisms
yDemand aggregation
yMarket-based credit programs
yRobust depreciation criteria
yTailored loan products
yLease purchasing and as-a-service
models
yBattery leasing or financing
yPerformance guarantees and more
robust warranties
yPartial loan guarantee
yConcessional financing
yGreen bonds
TRANSFORMING TRUCKING IN INDIA | 78 ZET Corridors as an Intersection
of Solutions
TRANSFORMING TRUCKING IN INDIA | 79 Aligning policy, charging, technology, and
finance innovation
Visionary, integrated partnership can unite solutions in all of the
above categories to create not just a roadmap to a ZET future but
also the physical infrastructure and conditions required to realise the
benefits of ZETs on an accelerated timeline. Establishing a dedicated
ZET corridor is a standout example of this potential. Featuring an
appropriate selection of charging stations, a well-located ZET corridor
can enable India to pilot and unlock the market potential for ZET
deployment across the country.
Right now, 50% of India’s vehicle freight traffic travels along seven
major corridors, connecting Delhi, Mumbai, Chennai, Kandla, Kochi,
and Kolkata.
68

Exhibit 43: Freight traffic on seven high-density corridors in India
The amount of road freight travel and economic activity along these
corridors presents an opportunity to strategically invest in charging
infrastructure development along any of these road networks to scale
ZET adoption.
yPioneering a demonstration ZET corridor can empower invaluable
testing and refining of best-in-class solutions. By electrifying a
specific corridor, government and fleet operators can concentrate
investments and test ZET adoption along a particular route. This
intentionally chosen corridor can provide proof of concept and
exemplify techno-economic feasibility of ZET use and widescale
adoption. It can act as a learning ground and spark ZET adoption,
while limiting risk. Moreover, ecosystem actors can use this ZET
corridor to test the most promising charging, policy, technology,
and financing solutions for electric truck adoption.
yCommitted government and favorable market conditions signal
promise. India already possesses the potent blend of government
resolve and market momentum it will take to realise an effective
electric trucking corridor and transition to zero-emissions trucking
fleets. The Ministry of Road Transport and Highways (MoRTH) is
outspoken on its intentions to facilitate a transition to ZETs and
is actively considering developing an electric highway along the
Delhi-Jaipur expressway or another highly travelled highway to
facilitate the movement of heavy-duty trucks and passenger buses
on electricity. Simultaneously, several Indian freight and logistics
firms have committed to electrifying a portion of their fleets. Tata
Steel has contracted 27 electric trucks to transport finished steel,
for example, while Dalmia Cement Bharat has announced it would
purchase 22 electric trucks as part of its e-truck initiative.
69
1
2
4
6
5
7
3
New Delhi
Kolkata
Chennai
Kochi
Mumbai
Kandla
TRANSFORMING TRUCKING IN INDIA | 80
yEnabling zero-emissions trucking on the highest-use areas can build
market momentum. Trucks travelling along these corridors typically
travel over 2,000 km to reach their destination, travelling as many
as 500 km per day to carry goods between these hub cities. Given
the length of these trips, reliable charging infrastructure is required
to support ZET adoption along these trucking routes. By deploying
adequate en-route public infrastructure, government and private
stakeholders can maximise investment to meet the charging and
refueling demand of ZETs. Alternatively, a ZET corridor could be
built on an intrastate highway, like the Pune-Mumbai expressway,
that would not require en-route charging. Electrifying a highly
travelled corridor can enable the ZET market to reach economies
of scale. Electrifying highways where there is a high concentration
of freight travel can lead to optimised charging utilisation, and
investments can enable cost-effective ZET travel along a critical
freight route.
Ultimately, the successful deployment of ZETs along a strategic high-
volume road freight corridor can catalyse the market and lead to
scaled adoption well beyond its own geography.
Shaping a ZET steering committee to propel ecosystem
development
Recognising the multi-stakeholder nature of ZET, policy development
and infrastructure deployment must involve collaboration with
fleet operators and OEMs. Effective deployment of ZETs will require
national government actors to coordinate with the private sector and
local government bodies. A ZET steering committee can have relevant
stakeholders from the public and private sectors, including:
1. Government such as representatives from transport, commerce
and industry, power, renewable energy, environment, and finance
departments.
2. Private sector such as OEMs, logistics service providers, charging
infrastructure providers, and financial institutions.
The committee is envisaged to undertake the following actions:
1. Advisory planning: Convene members to identify and act on
solutions to scale ZETs, as well as help inform national and state
policies to support a broader ZET and charging ecosystem.
2. Stakeholder coordination: Foster partnerships with a diverse
network of industry, public, and civil society actors. Work together
to increase public awareness around benefits and models, and
dispel myths around associated risks.
3. Technical assistance and capacity building: Provide technical
assistance support to ensure that financing, policy measures, and
research and development investments are coordinated to scale
ZET adoption. Undertake skill enhancement trainings to fulfil
knowledge and capacity gaps amongst local bodies, DISCOMs,
financial institutions, and potential and existing ZET workforce.
4. Pilot deployment: Identify and roll out pilots in partnership with
relevant stakeholders.
Overall, this steering committee can help the Indian government
and industry actors develop a framework for the deployment of
a dedicated ZET corridor and assess the market outlook for ZET
deployment.
TRANSFORMING TRUCKING IN INDIA | 81 Essential questions to ask on the road to a ZET corridor
Stakeholders across government, tech, infrastructure, and finance can contribute critical insights to inform development strategy. The following
are high-level questions to ask and answer in the consolidated effort to harmonise ZET supply and demand with infrastructure investment, and
together, drive market growth across India.
Exhibit 44: Market outlook queries to drive development
Identifying the optimal ZET corridor
Choosing the right corridor location is an essential first step. Ideal corridors for electrification will support a high volume of economic activity
and offer economic advantage for electrifying a specific freight flow. Below are five key parameters to help India identify a viable, high-impact
demonstration corridor that optimises economic and environmental benefits.
OUTLOOKSQUERIES
Policy
yWhat level of investment or subsidy would help drive initial ZET demand?
yWhat non-fiscal incentives could promote ZET adoption?
Technology and
Manufacturing
yWhat level of demand (number of trucks purchased per year) would be required for OEMs to dedicate a manufacturing
facility for ZETs to drive production scale?
yHow can ZETs support the PLI scheme and secure enough demand for battery manufacturing?
Infrastructure
yHow can the government work with DISCOMs to ensure the electrical infrastructure is ready to support wide-scale ZET
adoption?
yWhat policy tools and concessions can be leveraged to reduce charging infrastructure deployment costs?
yHow can charging utilisation be maximised?
Financing
yHow can actors come together to reduce the perceived and real risk of ZET adoption?
yCan financing instruments be implemented this year to drive ZET adoption?
yHow can multilateral and concessional financing be leveraged to seed India’s infrastructure investment in the ZET future?
TRANSFORMING TRUCKING IN INDIA | 82
 Exhibit 45: Pathway for development of ZET corridor
CRITERIA FOR
CORRIDOR SELECTION
JUSTIFICATION
KEY METRICS FOR
CONSIDERATION
Road freight volume
A jurisdiction’s industrial output, port activity, and state economic output
is data that can be used to quantity the volume of cargo transported along
a particular corridor to prioritise those that connect industrial districts and
support regional economies.
yIndustrial activity
yTonne/km
Trucking economics
Vehicle utilisation patterns and charging demands of MDVs and HDVs all
affect the economics of electrification. A detailed total cost of operations
can help ecosystem actors analyse various freight patterns as well as
embodied transportation costs of certain freight use applications along a
given corridor.
yEmbodied transport costs
yTotal operating costs
Routing
Assess routing for ZET-optimal scenarios. For example, corridors that
support bidirectional, closed loop, or return-to-base freight flows with
clear rest stops or layovers for charging may support ZET use. Shorter
routes may also be viable, if a truck could reasonably complete the route
on a single charge.
yPoint of origin
yDistance travelled
yTraffic density
yRoad feeder network
Policies
Understand existing EV and logistics policy landscape in states that the
corridor will pass through. The states with favourable EV landscape will
likely be early adopters.
yState taxes
yLogistics policies
yEV polices
Cargo diversity/
freight flows
The types of goods transported can determine if certain types of
freight travel are better suited for electrification. Additionally, the type
of container, such as bulk vs. non-bulk freight movement, should be
assessed.
yMDT vs. HDT travel
yShipment diversity
yBulk vs. non-bulk
yProduct volume & weight
Strategic corridor development
TRANSFORMING TRUCKING IN INDIA | 83 Additionally, supporting conditions such as road infrastructure, land
availability, electric capacity, and distributional infrastructure are also
important factors in considering the feasibility and costs of developing
charging infrastructure along a specific corridor to facilitate ZET travel.
In all cases, electrical and charging infrastructure investments will
be required to ensure that ZETs can seamlessly meet a range of duty
cycles along any prioritised corridor — but scope will vary based on
unique corridor attributes. A thorough analysis of existing freight
volumes and projected ZET traffic can provide the insight needed to
assess infrastructure requirement, and inform strategy to maximise
charger utilisation, minimise costs, and ensure ZETs have access to en-
route charging to complete trucking routes.
Making a ZET corridor happen: It takes an
ecosystem
Successful, efficient operationalisation of the ZET corridor will require
concerted public- and private-sector collaboration (Exhibit 46) from
the beginning and throughout the course of this impactful initiative.
In the early stages, national and state governments, DISCOMs, and
charging infrastructure providers can work together to thoroughly
evaluate road infrastructure network, grid capacity, and land
availability, and from there, develop a strategy to streamline
infrastructure development. By assessing the economics of vehicles
and chargers, governments and development banks can allocate
viability gap funding to overcome upfront cost barriers. OEMs and
fleet aggregators can invest in developing technology and the supply
chain to ensure deployment of trucks on the corridor.
India is well-positioned to leverage concessional financing from
development banks to deploy a demonstration ZET corridor. A
considerable amount of funding is set aside to promote innovation
and sustainable energy breakthroughs, and the deployment of ZET
fleets and a ZET corridor aligns with these development objectives.
A detailed proposal on the feasibility, and market potential of
developing a ZET corridor will be required to secure the necessary
concessional financing.
The development of a first-of-its-kind ZET corridor in India will
enable ZETs to garner market momentum. The successful adoption
of ZET fleets along a designated corridor can help assure truckers
and fleet aggregators that ZETs can be readily deployed to meet their
delivery quotas and trucking demands. End-to-end zero-emission
mobility along a dedicated ZET corridor can be achieved by meeting
charging demand with renewable energy. Furthermore, learnings
from the corridor development process can be leveraged to electrify
all of India’s major freight corridors. First-mover experiences can be
documented to streamline ZET adoption and enable industry actors to
overcome market barriers.
TRANSFORMING TRUCKING IN INDIA | 84 Exhibit 46: Stakeholder action to institute a ZET corridor
CHARGING INFRASTRUCTURE
PROVIDERS & DISCOMS
NATIONAL AND STATE
GOVERNMENTS
OEMS AND FLEET OPERATORS
FINANCING INSTITUTIONS
AND DEVELOPMENT BANKS
yEstimate needed electrical
infrastructure to facilitate
charging of MDTs and HDTs
along the corridor.
yDetermine the size and needed
power capacity to adequately
plan for electrical infrastructure
upgrades.
yProvide funding/subsidies
to ensure that the minimum
viable number of trucks can be
deployed.
yProvide land concessions
for charging infrastructure
development.
yInvest in R&D for developing
ZET models.
ySet fleet deployment
commitments along the ZET
corridor.
yStreamline supply chain for ZET
deployment.
yProvide viability gap funding
for infrastructure development.
yPilot financial products and
build internal capacity to
finance ZETs.
TRANSFORMING TRUCKING IN INDIA | 85 Conclusion and Next Steps
TRANSFORMING TRUCKING IN INDIA | 86 Turning ambition into coordinated action with
a unified and systematic approach to the ZET
transition

India is in a prime position to stand as a global leader in the transition
to zero-emissions trucking. In order to realise the significant long-term
economic and environmental benefits of ZET, however, government,
technology, industry, and finance leaders must align decisively to
develop and enact near-term, precise market and policy intervention.
At a macro level, accelerating today’s positive ambition loop will
help foster ZET market development. This cycle begins with the
development of depot and en-route infrastructure along central
highways and key freight corridors. Prioritising this infrastructure
investment will be key to building market confidence as truck
operations need assurance that ZETs can meet their operational
requirements. The next step will be incentivising first movers to adopt
ZETs through demand-side policy schemes and direct purchase
subsidies to build a sustained level of ZET demand. Such demand
can effectively encourage manufacturers to dedicate manufacturing
facilities to ZET production. Lastly, scaled market development and
supply-side policies can provide the leverage needed to mobilise
banking and NBFCs to avail loans tailored to ZET procurement.
Exhibit 47: Pathways to ZET market growth
Driving
irreversible
ZET market
growth
The mobilisation 
of ZET financing
to scale growth
Development of 
charging I nfrastructure
Policies that help 
drive first-mover 
ZET adoption 
Scaled manufacturing
investment and 
greater ZET supply     
Moving the market towards tipping points
Despite their promise, ZETs will not be deployed at the speed or scale
required to capture the benefits described in this report without a
concerted and coordinated effort across stakeholder groups. These
efforts should aim to realise critical thresholds of supply and demand
that allow for market forces to become the primary driver of scale.
One signal of this tipping point being close at hand would be industry
commitments to establish dedicated manufacturing facilities for
ZETs. According to India’s heavy duty vehicle manufacturers, annual
demand of 3,000–5,000 units would be sufficient to justify investments
in commercial-scale manufacturing plants.
70
A whole-system approach
designed to balance advanced demand with early supply can seed the
market and lay the foundation for scaled adoption of ZETs.
To facilitate a ZET transition, active leadership is required from across
the ZET ecosystem.
yGovernment can amend and adopt policies to support the
emergent ZET market. Setting clear targets and developing
schemes that support ZET adoption will send a clear market
signal that India is serious about its energy security, economic
advancement, and climate commitments.
yOEMs can invest in their ZET manufacturing capacity, and lenders
can mobilise finance to drive adoption.
yLogistic providers can adopt ambitious zero-emissions vehicle
adoption targets and drive ZET demand.
yFinanciers can shape new structures that recognise the unique
economics of ZET lending.
TRANSFORMING TRUCKING IN INDIA | 87 The countdown to ZET begins: Laying out the short-, medium-,
and long-term steps to India’s ZET future
A strategic course of action to scale ZETs with intermediate milestones will enable stakeholders to track progress against India’s ZETs transition.
The exhibit below outlines short-term, medium-term, and long-term measures that can be taken by policymakers, OEMs, truck operators,
corporations, and charging station providers.
TRANSFORMING TRUCKING IN INDIA | 88 Exhibit 48: Measures to fast-track zero-emissions trucking in India
POLICYINFRASTRUCTURETECHNOLOGYFINANCE
Near term
(<3 years)
yExisting FAME or new
scheme to subsidise the
upfront cost of ZETs
yZETs as a priority in state EV
policies
yA ZET demand aggregation
to promote deployment
yRoadmap for ZET charging
and grid preparedness
ySubsidised land for public
chargers
yCharging infrastructure
along critical highway
networks for en-route
charging
yR&D grants and
investments
yPublic-private partnership
for joint research and
technology development
ySkilled workforce for
manufacturing, assembly,
repairing, and servicing ZETs
yTailored lending products
for lowering the cost of
borrowing and increasing
debt financing for ZETs
yStrategic roadmap to
mitigate and transfer the
risk of ZET adoption
Medium
term
(3–5 years)
yA ZET fleet requirement
and supply mandate
yInterest subvention scheme
for ZETs
ySubsidies for private depots
and semi-public charging
infrastructure
ySmart charging solutions
(time-of-day tariff, vehicle
grid integration, etc.) for
grid stability
yDomestically manufactured
MDTs and HDTs at scale
yIncreased model
availability in the market
yGlobally cost- and
technology-competitive
ZETs
yDedicated reserves for loan
guarantees
yIncreased performance
guarantees and warranties
yInnovative business models
such as vehicle and battery
leasing programmes
Long term
(>5 years)
yZETs as a priority in
national manufacturing,
logistics, and trade policies
yInefficient and polluting
diesel trucks disincentivised
with additional fuel cess,
pollution cess, higher road
tax, etc.
yZET-ready upstream
electrical infrastructure
yRenewable energy
integration to facilitate net-
zero charging
yShifted manufacturing
focus to selling and
producing only zero-
emissions vehicles
yLeading exporter of ZETs
yLow interest loans for ZETs
yZET finance is completely
commoditised
TRANSFORMING TRUCKING IN INDIA | 89 Unlocking the full value of the ZET transition with immediate planning and committed collaboration
By aligning efforts now, government and private sector actors can help India maximise the economic and environmental benefits of ZETs.
Supportive, ambitious policies at the national, state, and city level can advance charging infrastructure development and ZET deployment, while
driving market growth by accelerating and synchronising ZET supply and demand. Private sector engagement and investment can play a vital
role in stepping up to the challenge of high-quality ZET manufacturing and fleet deployment. Financing institutions will also play a critical role in
mobilising the level of capital needed to support innovative business models around ZET deployment.
Through a consolidated effort coupled with favorable economics, a ZET future is well within reach for India. ZETs can deliver solutions to India’s
most significant national priorities. Replacing diesel with ZETs in India could mitigate 2.8 cumulative gigatons of greenhouse gas emissions
between now and 2050 — one of the world’s biggest decarbonisation opportunities in the transportation sector. ZETs have already reached cost
parity with diesel on a total cost of ownership basis. Transitioning to ZETs would represent a long-term economic win for the country by lowering
trucking costs, creating a globally competitive export industry, slashing economic risks by reducing oil expenditures by 116 lakh, and positioning
India as a low-cost, low-carbon manufacturing hub.
71
The nation’s truck sector is growing fast; ecosystem actors have a historic opportunity to shepherd its growth towards a clean future that can
and will produce substantial economic, energy security, and emissions benefits for India — while establishing India as a global leader
in zero-emissions trucking. These opportunities are under active consideration by NITI Aayog, RMI, and partners — and entirely within our
collective reach when supported by a community committed to ensuring an effective ZET transition.
TRANSFORMING TRUCKING IN INDIA | 90 Technical Appendix
TRANSFORMING TRUCKING IN INDIA | 91 Truck classifications and use-case scenarios
Truck movements are typically categorised based on vehicle weight, freight movement, and make.
Gross vehicle weight rating (GVWR) of a truck is the maximum load it can carry plus the weight of the truck itself (curb weight).
yLight-duty trucks: <3.5 tonnes
yMedium-duty trucks: 3.5–12 tonnes
yHeavy-duty trucks: >12 tonnes
Trucks generally cater to the following freight movement use cases,
characterised by distance travelled as well as origin and ending
destination:
yShort (intra-state) use cases involve intercity travel or other short
distances in the range of 100–150 km.
yRegional use cases involve freight movement along state highways
(e.g., between a regional distribution center and local warehouses).
yLong-haul use cases typically involve interstate travel along major
national highways (e.g., from a manufacturing facility or export-
import terminals to regional distribution centers).
2.A
TRANSFORMING TRUCKING IN INDIA | 92 SCENARIOS
BAU 2030 BAU 2050
HIGH ELECTRIFICATION
2030
HIGH ELECTRIFICATION
2050
ZET MDT sales penetration 0.05%27%9%100%
ZET HDT sales penetration 0.01%14%4%75%
Grid emissions factors (kg CO
2
/MWh) 683 480 38221
Expected ZET sales penetration and associated carbon emissions reductions
NITI Aayog and RMI conducted an in-depth techno-economic analysis to understand and quantify the benefits that replacing diesel trucks with
ZETs can bring to India, and to parse out the opportunity afforded by an urgent, proactive transition as opposed to letting market momentum
occur naturally. A business-as-usual mode split trajectory based on the current freight split between rail, road, and maritime shipping was used to
estimate the amount of freight moved via road and the truck stock. By assessing India’s current stock of freight vehicles, researchers developed an
analytical model to evaluate the impact of ZET adoption through 2050. From there, we compared two scenarios:
1) A high-electrification scenario in which India reaches 100% ZET sales penetration for MDTs and 75% for HDTs by 2050, and reduces its grid
emissions in line with 1.5
°
C emission reduction targets.
2) A business-as-usual (BAU) scenario in which ZET uptake is slow and the grid emissions factor declines gradually at a rate of decline
witnessed over the past decade.
2.B
TRANSFORMING TRUCKING IN INDIA | 93
Total operating costs of four truck movements
A detailed analysis of capital and operating expenses was completed to compare the total cost of ownership (TCO) of ZETs against existing
diesel trucks. The TCO calculations were derived based on a mature production scenario defined as the production of ZETs with a dedicated
production facility and the achievement of reasonable scale and a competitive market price. Truck performance data was collected to inform
this analysis and some high-level figures regarding truck operating characteristics are listed in the table below. Additionally, the following cost
elements were derived and included in the TCO calculations:
yVehicle purchase cost: derived from the average price of diesel
trucks in the Indian market today for MDT and HDT use cases. BET
and FCET vehicle prices were calculated by assessing the balance
of truck price plus the battery pack and/or fuel cell cost to meet the
required duty cycle.
yMaintenance costs: calculated as a portion of the vehicle
purchasing cost.
yFuel costs: for ZETs and diesel vehicles, fuel spend was derived by
taking the product of the one-year average cost of diesel or current
electricity rate, the average vehicle efficiency, and the annual
kilometres travelled.
yInsurance: modeled as a percentage of the vehicle cost and
depreciated over the vehicle’s useful life.
yTax: road taxes and tolls that are paid annually.
yRegistration: the one-time registration cost at the time of purchase.
yInfrastructure (applicable to BETs only): the upstream infrastructure
costs associated with vehicle charging are derived as the
per-vehicle costs of charging hardware and charging station
installation.
yBattery replacement (applicable to BETs only): battery life
and cycling were evaluated to determine the need for battery
replacement and the subsequent cost.
BATTERY ELECTRIC TRUCK SPECIFICATIONS
(2022)
MDT SHORT MDT REGIONAL HDT REGIONAL HDT LONG HAUL
Vehicle life (years)15151510
Battery size (kWh) 781472051,042
Efficiency (kWh/km)0.780.741.872.08
Average distance travelled in a day (km) 100 200 200 500
2.C
TRANSFORMING TRUCKING IN INDIA | 94
Charging requirements of ZETs
NITI Aayog and RMI developed a quantitative model to analyse the impact of ZET charging and to estimate the required energy load and number
of chargers needed to satisfy increasing ZET adoption. The process below describes how charging infrastructure figures were derived.
1. The number of chargers required is calculated based on each
truck’s actual electricity requirement, which depends on daily
kilometres driven.
2. The electricity requirement is based on daily driving distance and
vehicle efficiency in kWh/km.
3. Charger size is based on existing charging units available on the
market. The charger appropriate for a given vehicle is calculated
by comparing the charge time required at different charger
powers for a given battery size. The analytical model then sizes the
charger based on the lowest-power capacity that can achieve the
minimum acceptable charge times (maximum 8 hours for depot
and 2 hours for en-route; minimum 10 minutes for all types due to
safety concerns).
4. The model accounts for charging utilisation rates, or the
percentage of each day that a given charger is in use. As electric
fleets and charging networks grow, and as logistics technology
matures, utilisation rates for charging stations will improve. Thus,
the ratio of chargers required per vehicle will decrease over time.
2.D
TRANSFORMING TRUCKING IN INDIA | 95 Policy Appendix
TRANSFORMING TRUCKING IN INDIA | 96 Overview of national and state polices that can
affect ZETs
yFAME scheme: The Department of Heavy Industry launched the
Faster Adoption and Manufacturing of Electric Vehicles (FAME)
scheme in 2015 for a period of two years, which was later extended
to March 2019. Based on stakeholder consultations and learnings
from FAME, DHI launched phase two of FAME in April 2019.
72

The scheme was expanded to promote EV adoption through the
three verticals; incentivising EV demand, establishing a charging
infrastructure network, and initiating public awareness campaigns
to inform the public on the benefits of EV adoption.
73
The initiatives
outlined under the FAME scheme have been instrumental in
increasing EV and component manufacturing and demand for EVs
in India.
74
The success of the FAME scheme shows that policies that
promote and incentivise vehicle electrification are effective and can
accelerate EV adoption.
yCharging standards: The Ministry of Power issued guidelines
outlining minimum requirements for public charging infrastructure
in 2018. These requirements list specifications for infrastructure
equipment, cabling, and charger models. The standards establish
minimum density requirements between charging points,
specifying that a charging station should be placed every 3 km
2
,
and a charging station should be set up every 25 km along highway
corridors. Additionally, the standards outline that EV charging is
a service and does not require a license to operate.
75
This means
that charging stations are not subject to electricity distribution
regulations that enabled more private charging infrastructure
providers to enter the market. These can be elaborated to
outline minimum charging specifications for ZETs, and require
high-powered, ultra-fast chargers owing to their larger battery
capacities.
yBharat Stage (BS) VI emissions standards: Set by the Central
Pollution Control Board under the Ministry of Environment, Forest,
and Climate Change (MoEFCC), these standards are designed to
improve air quality by reducing tailpipe emissions such as PM
and NOx. Among the most stringent standards in the world, BS
VI standards require trucks to emit 63% less PM emissions (g/km)
and 88% less NOx emissions (g/km) than the former BS IV emission
standards.
76
Successful adoption of these standards stemmed
from a coordinated effort to increase public awareness, targeted
advocacy efforts, and sustained policy and legal analysis. When
considering how to implement policies to support ZET demand
and supply in India, a similar combination of tactics (i.e. raising
awareness around the benefits of ZET adoption and providing
technical guidance for broader implementation) can deepen
engagement on the issue.
yFuel consumption standards for MDT and HDTs: Fuel
consumption standards have been established for heavy-duty
vehicles with a GVWR of 12 tonnes or more. Fuel standards are
based on the vehicle’s axle configuration and GVWR of the vehicle,
and as the policy shifts from phase 1 to phase 2 there will be a 10%
increase in fuel consumption standard stringency. In April 2020, a
similar policy structure was also enacted for light- and medium-
duty vehicles with a GVWR of 3.5–12 tonnes. Further tightening of
standards will encourage more OEMs to manufacture ZETs.
yAatmanirbhar Bharat (Self-Reliant India) Initiative: This
initiative is a key focus of the Honorable Prime Minister, as he
sets the vision for India to become self-reliant and minimise
the risks posed by irregularities in the global supply chain. A
focus on enhancing domestic manufacturing capabilities and
tapping into the expanding export market is a key aspect of this
campaign. To showcase the commitment towards enhancing
local manufacturing, the government launched a production-
2.A
TRANSFORMING TRUCKING IN INDIA | 97 linked incentive scheme for 10 key sectors with a total outlay
of ₹1.45 lakh crore over a period of five years.
77
The key sectors
relevant to EVs such as batteries, auto components, and solar
PV modules constitute close to 55% of the total outlay, signaling
the government’s intention to advance the transformation in the
nation’s automotive and energy sectors.
yNational Programme on Advanced Chemistry Cell (ACC)
Battery Storage: Recognising the dominance that battery
technologies will play in advancing electricity grids, solar energy
proliferation, and grid reliability, the Department of Heavy Industry
initiated a national program to increase the manufacturing of
advanced chemistry cell battery storage and the number of
gigafactories producing batteries in India under the Production
Linked Incentive scheme. The scheme allocates ₹18,100 crore to
promote the manufacturing and export of advanced chemistry
cell batteries. With this scheme, India aims to position itself as a
lead manufacturer of batteries and other electric vehicle parts to
become self-reliant and competitive in the global export market.
78
Domestic policies that advance energy storage technology will be
critical for catalysing the domestic ZET market and catapulting
India as a global leader in freight mobility.
yProduction Linked Incentive (PLI) Scheme for Automobile &
Auto Components: Launched in September 2021 with a capital
outlay of ₹25,938 crore, this scheme provides fiscal incentives
to enhance India’s manufacturing capabilities for advanced
automotive products, battery electric vehicles, and hydrogen fuel
cell vehicles. The PLI scheme will create over 7.5 lakh jobs in auto
and component manufacturing, and lead to investments of ₹42,500
crore and incremental production of ₹2.3 lakh crore in India. It
will also boost localisation of EVs, facilitate investments, and
strengthen India’s EV manufacturing ecosystem, including for ZETs.
Furthermore, dedicated production-linked mechanisms for ZETs
can fast-track the transition.
yThe Draft National Logistics Policy: To modernise India’s logistics
sector so that it remains internationally competitive, this policy
calls for the promotion of more sustainable transport, deepened
environmental consciousness, and cleaner logistical operations.
79
Trucking electrification can play a vital role in enabling India
to achieve its logistics sector sustainability goals by reducing
dependence on high-emissions vehicles. The draft policy also aims
to improve India’s ranking in the Logistics Performance Index (LPI)
while reducing the cost of logistics by 5% over the next five years.
80

Owing to their lower operating costs, ZETs can help drive the
policy’s economic objectives, too.
yThe Logistic Efficiency Enhancement Program: This program
develops infrastructure solutions to address the high logistics
costs and current inefficiencies in India’s material handling
infrastructure. The policy outlines steps to integrate digital delivery
tracking, improve network capacity, and create a robust hub-and-
spoke infrastructure system for deliveries.
81
Improving logistics
efficiency can help modernise the trucking sector and enable
freight operators to utilise ZETs in more use cases.
yDigital India: This initiative seeks to improve the nation’s digital
network capacity and connectivity, which could be leveraged by
ZET fleet operators to develop optimal routes and monitor charging
needs.
82

TRANSFORMING TRUCKING IN INDIA | 98 STATE/CITY
EV ADOPTION
TARGET/DIESEL
PHASEOUT
RETROFIT/
SCRAPPAGE
PROGRAM
CHARGING
INFRASTRUCTURE
PURCHASE
SUBSIDIES
TAX/PERMIT
EXEMPTIONS
Andhra Pradesh
83
XXX
Assam
84
XXXX
Delhi
85
XXXXX
Goa
86
XXXXX
Gujarat
87
XX
Haryana
88
XXX
Himachal Pradesh
89
XXX
Karnataka
90
XX
Kerala
91
XXX
Madhya Pradesh
92
X
*Maharashtra
93
XXXXX
Meghalaya
94
XXX
Odisha
95
XXXX
Rajasthan X
Tamil Nadu
96
X
*Telangana
97
X
Uttarakhand
98
X
West Bengal
99
X
Notified state EV policies
2.B
X Signifies that the state EV policy makes a direct reference to a specific scheme or attribute
* Signifies this policy mentions charging infrastructure for trucking applications
Note: The table above lists the core components of state EV policies. While most EV policies do not directly mention trucking, a supportive EV ecosystem can facilitate a more seamless deployment of ZETs.
TRANSFORMING TRUCKING IN INDIA | 99 Endnotes
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