Electric truck sales pick up in August after PM E-DRIVE incentives, private financing schemes kick in

A total of 60 electric trucks in the medium and heavy goods carrier categories were registered as of 19 August, according to the government's Vahan portal. Monthly sales so far in 2025 have ranged from 11 in February to 38 in May.

The ministry of heavy industries notified the guidelines for claiming e-truck incentives under the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme in early July, offering upfront capital subsidy of ₹2.7-9.3 lakh for the purchase of each truck. It is set to subsidise more than 5,600 such trucks.

The scheme is applicable for medium and heavy goods carriers, which weigh 3.5-12 tonnes and 12-55 tonnes, respectively. The PM E-DRIVE scheme was extended this month for two more years to March 2028 as the incentives carved out for electric buses, trucks and vehicle-charging infrastructure were not disbursed.

Electric trucks are integral to the decarbonisation of India’s massive logistics sector, which is responsible for the movement of goods in the country. Transportation accounts for about 12% of the carbon emissions in the country, according to the International Energy Agency. Diesel trucks contribute about a third of these emissions, according to a study by Niti Aayog and WRI India.

“Long-haul electric trucks have virtually not taken off," Niti Aayog said in a report on 4 August. The federal policy think-tank stated that inadequate financing options were dragging e-truck sales. Electric trucks and buses cost about two to three times as much as their fossil-fuel equivalents, it said.

 

Pooling funds

According to Niti Aayog, of 834,578 trucks sold in India in 2024, only 6,220 were electric. Of these, 95% (5,940) were of less than 3.5 tonne capacity. Only 280 trucks above the 3.5-tonne category—vehicles critical for long-distance freight transport – were sold.

It suggested pooling of funds from multilateral development banks and the public budget to provide lower interest loans for the procurement of e-trucks. It recommended nurturing the truck-leasing industry to make it easier for small owners to acquire electric trucks.

Private lenders have stepped up to make e-trucks more affordable. Ease of Doing Business, an initiative of the commerce and industry ministry, under its e-mobility arm National Highways for Electric Vehicles (NHEV), started a ₹500 crore viability gap funding programme and credit outlay backed by private capital to exclusively cover overall deployment of electric trucks.

“The recent ₹9-10 lakh incentive announced under the PM E-DRIVE scheme is further reducing the total cost of ownership, but electric truck fleet operators still need initial capital to accelerate their procurement and deployment," NHEV said about its fund for e-trucks on 1 August.

NHEV used its financing scheme in a tech trial with 55-tonne N3 electric trucks made by Ashok Leyland in September 2024.

The private capital-backed funding “will significantly reduce the price of electric trucks in India as it is based on a specific technical trial conducted on 55-tonne electric trucks, which is expected to come down to a price of ₹99 lakh in a few weeks from now. And post-PM E-DRIVE incentive, it will further come down to ₹90 lakh from the current ₹1.25 crore price tag," said Abhijeet Sinha, programme director, Ease of Doing Business.

The key difference between the government’s scheme and private lending for e-trucks is the scrapping mandate. The PM E-DRIVE scheme for e-trucks contains a scrapping mandate, while the private sector lending scheme does not.

Under the PM E-DRIVE scheme, buyers of e-trucks have to produce a scrapping certificate for a truck of similar size. The scrapping mandate may lead some small buyers to rethink their decision to shift to an electric truck, private sector financiers told Mint on 11 August.