Indian truckers see EVs as a way to fight pollution

India, the world’s most polluted country after Bangladesh, must address a truck-sized problem if it is to meet its climate goals: a greener commercial fleet to limit emissions, which account for a third of the country’s polluting vehicle smoke.

It’s an opportunity Ashok Leyland Ltd., Asia’s fourth largest truck manufacturer, is keen to seize.

“In the next six to 12 months, the first battery electric vehicles will come to market,” Chief Technology Officer N. Saravanan said in an interview earlier this month. The company won’t have a “big launch saying it’s moving to electric vehicles,” but will launch multiple models in small numbers, he said.

Last month, Ashok Leyland announced plans to build autonomous electric trucks for Indian ports. The company also works with Adani Enterprises Ltd. and Reliance Industries Ltd. to bring hydrogen fuel cell vehicles to market and is investing 12 billion rupees ($146 million) in its electric vehicle subsidiary, Switch Mobility. “With Reliance, you will see the continued evolution of hydrogen internal combustion engines,” Saravanan said.

India, the fifth largest economy in the world, relies on roads to transport 70% of its goods. With increasing urbanization and rising consumer demand, the number of trucks needed is expected to more than quadruple by 2050, raising climate concerns. But the shift to cleaner vehicles will not be easy – the higher price of electric trucks compared to diesel trucks and the lack of charging infrastructure pose major obstacles, especially for the small fleet operators who own most of the trucks in India.

“They contribute disproportionately to climate change,” said Samhita Shiledar, manager of the India program at US-based clean energy think tank RMI. “The magnitude of the opportunity is very large,” considering the industry represents “India’s largest decarbonization effort right now” to meet its climate goals.

India has committed to net-zero emissions by 2070. It has also committed to reducing the emissions intensity of its gross domestic product by 45% by 2030. According to RMI, the widespread adoption of zero-emission trucks could cut annual CO2 emissions from trucking by almost half by 2050.

India’s largest truck manufacturer Tata Motors Ltd., which already has a small electric truck on the market, presented several long-distance prototypes in January. China’s BYD Co. has reportedly shipped several trucks to Adani Group for its ports. Startups like InfraPrime Logistics, Olectra Greentech Ltd. and Triton EV have announced that they are developing electric models.

On Wednesday, 15 companies including Inc., Nestle SA and India’s Aditya Birla Group joined forces to push the electrification of the country’s truck fleet. They announced several pilot projects and signaled demand for more than 7,700 e-trucks by 2030.

While the potential is great, the existing market is tiny. According to data analyzed by BNEF, sales of electric vans and trucks in China and parts of Europe doubled in 2022 compared to the previous year. India, on the other hand, has only a fraction of the raw materials needed to meet battery needs and only recently launched a pilot project for hydrogen-based vehicles.

In addition, the vast country only has one charger for every 135 EVs, while the global average is around 20 EVs. With no standard charging technology in India and most of the infrastructure geared towards two- and three-wheelers, it may be some time before truck drivers are willing to give up their diesel-powered vehicles.

The initial cost of an electric truck is also higher than that of a diesel truck – although running costs are lower – another factor discouraging new buyers. Therefore, manufacturers may need to look for new ways to sell their models.

“The market is evolving from purely ownership-based models to leasing and financing, and is looking for innovative ways to structure the purchase,” said Rahul Mishra, partner at global consulting firm Kearney Inc. Overcoming these hurdles requires more investment, which is yet to come are with increasing demand for electric trucks. “It’s almost like a chicken and egg problem,” said Maynie Yun Ling Yang, economic transportation analyst at BloombergNEF. But government subsidies, regulations and corporate sustainability mandates are key to making the clean jump, she says. According to BNEF, India is one of the countries where large truck sales will grow the most globally between 2023 and 2040. This leads to stakeholders calling for action to increase the production of clean trucks.

And while the national government has a Rs. 100 billion subsidy program to encourage the uptake of two- and three-wheelers, passenger cars and electric buses, and Indian states have separate policies for electric vehicles, none have policies for trucks. Organizations like the International Council for Clean Transportation are pushing for change. “There is a global shift away from internal combustion engines,” said Amit Bhatt, ICCT’s India chief. “But you need someone to stimulate demand.”

The best agency for this is the government, he said. Some of his proposals are to incentivize trucking in Delhi to maximize air quality benefits, encourage the deployment of powerful charging infrastructure to attract private companies, and have these vehicles and manufacturers sold by some of the many in Delhi levied tax exempt state. Falling technology costs and government support point to rapid expansion in clean truck sales in the coming years.

“It’s only a matter of time before we catch up,” said Ashok Leyland’s Saravanan. “We’re not that far behind.”

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