CV electrification in India remains mired in high costs, lack of infrastructure and expertise, even as its northern neighbour seems to have successfully solved the puzzle
01 Nov 2024 | 5227 Views | By Shahkar Abidi
In early 2024, Shenu Agarwal, the Managing Director and CEO of Ashok Leyland, undertook what seemed like a routine visit to China, a geography that looms large in the global electric vehicle (EV) market.
What Agarwal witnessed on the highways of this sprawling country wasn't merely an expected showcase ...
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In early 2024, Shenu Agarwal, the Managing Director and CEO of Ashok Leyland, undertook what seemed like a routine visit to China, a geography that looms large in the global electric vehicle (EV) market.
What Agarwal witnessed on the highways of this sprawling country wasn't merely an expected showcase of electric trucks but a glimpse into a logistical upheaval—one that left a deeper impression than anticipated. The sight of trucks pulling into stations to swap batteries in three minutes rather than stopping for hours to recharge was not just a technological feat but a signal of what may soon become a paradigm shift in global logistics.
China's rapid embrace of battery-swapping for medium and heavy-duty trucks reflects a highly coordinated logistical ecosystem. What Agarwal saw firsthand was a process where an electric truck, indistinguishable from its diesel counterparts, could enter a swap station, exchange its depleted battery for a fully charged one in as little as three minutes, and return to the road without delay. This model, now a reality across major freight routes in China, represents a new era where energy, transportation, and logistics converge seamlessly.
"I was surprised," remembers Agarwal. His astonishment was not merely at the efficiency of the system but also the strategic implications it held for the global trucking industry. In China, a business model has emerged: trucks sold without batteries, relying on a subscription-based leasing system that shifts the responsibility for energy storage to state-run enterprises. Power companies manage vast networks of battery banks, ensuring a constant flow of charged cells, and in turn, truck owners pay a fee for access.
The numbers tell a story of rapid adoption. A study by JMK Research & Analytics noted that, in 2022, China accounted for 80-85% of the global electric truck market, with 52,000 units sold. These electric trucks, primarily deployed in ports, mining sites, and urban logistics, owe much of their success to the battery-swapping model. In cities like Shenzhen, government subsidies for Electric Logistics Vehicles (ELVs) have enabled price parity with internal combustion engine (ICE) vehicles, further accelerating adoption.
The technical efficiency of these trucks is clear. Short-haul swap-capable vehicles are typically fitted with 141 kWh or 282 kWh batteries, optimised for routes under 100 kilometers. Where traditional plug-in charging might require 40 minutes on a DC fast charger—or several hours on a standard outlet—battery swapping takes only three to six minutes. For fleet operators, this downtime reduction directly translates to higher delivery rates and better profitability.
By 2023, China's electric truck market had swelled to $2.4 billion, with battery-swapping trucks comprising 80% of the vehicles in this category. A report from IMARC Group forecasts continued exponential growth, projecting the market to reach $15.6 billion by 2032, with a compound annual growth rate (CAGR) of over 23%. This expansion, driven initially by heavy government subsidies in the mid-2010s, has since gained momentum, even as state financial support has tapered off, signaling a maturing market.
The Indian electric truck market faces challenges such as high upfront cost, particularly for heavy-duty models that require massive battery packs.
For automotive industry insiders across the globe, China's battery-swapping model holds undeniable appeal. The concept of renting batteries rather than owning them presents a solution to one of the most significant cost barriers in electric trucking—the price of the battery itself, which can account for 50-70% of a vehicle's purchase price. By removing this upfront cost, fleet operators are able to focus on total cost of ownership, a critical factor as economies pivot toward electrification.
However, this model presents a unique set of challenges for markets like India, where the trucking industry is still in the early stages of electrification. India, the world's sixth-largest truck market, saw over 300,000 diesel trucks sold in FY2023. While legacy manufacturers like Tata Motors and Ashok Leyland are making strides toward sustainable mobility with their net-zero commitments, the market remains nascent. Players like Eka Mobility and TI Clean Mobility are beginning to enter the electric truck space, but large-scale battery swapping remains an underdeveloped concept.
In the light-duty segment, Tata Motors has made inroads with its Ace EV, a popular choice for e-commerce logistics. Ashok Leyland and Infraprime Logistics are also active, developing medium and heavy-duty electric trucks for the domestic market. International partnerships, such as Volvo Eicher Commercial Vehicles' (VECV) collaboration with Amazon to deploy up to 1,000 electric trucks, are further examples of how the industry is evolving. Meanwhile, firms like the Adani Group are sourcing electric trucks from Chinese manufacturer BYD for port operations.
Despite these developments, the Indian electric truck market faces substantial barriers. A key challenge remains the high upfront cost of electric trucks, particularly heavy-duty models that require massive battery packs. An electric truck with an 800-1,000 kWh battery can cost upward of Rs 1.5 crore—two to three times the price of its diesel equivalent. For an industry where 50% of freight traffic traverses just seven major highways, the lack of adequate charging infrastructure poses a further obstacle to widespread adoption.
In this context, the concept of battery swapping has begun to gain some attention. Companies like Sun Mobility and Battery Smart are exploring its potential, though the road ahead is fraught with challenges. The lack of standardised infrastructure and the absence of significant government backing, compared to China, are key hurdles. Nonetheless, early initiatives are underway—Ashok Leyland unveiled India's first battery-swappable electric bus in partnership with SUN Mobility six years ago. Similarly, SUN Mobility has teamed up with Veera Vahana, a Bengaluru-based bus manufacturer, to develop battery-swappable buses.
For battery swapping to take root in India, several factors must align. Chetan Maini, co-founder of SUN Mobility, emphasises the need for favorable government policies, a robust energy grid, and a strong logistical framework. Consumer acceptance will also play a crucial role. As of now, India's infrastructure is ill-prepared to support a large-scale shift to battery swapping, and the timeline for widespread adoption remains uncertain. Still, the potential is clear. With sufficient investment and strategic planning, India can follow in China's footsteps, transforming its trucking landscape by 2030.
For now, industry leaders like Shenu Agarwal see China's experience as both a lesson and a blueprint. While India's electric future is still on the horison, it is not just the vehicles themselves that must evolve, but the entire ecosystem that supports them.
Taking Mindful Steps
Even as the Chinese examples provide food for thought, Agarwal is no stranger to the whirlwind of hype surrounding electric vehicles. Over the years, he has watched the excitement build, crest, and, in his words, "come back to reality"—both on the global stage and within India's borders. The electric revolution, particularly in the commercial vehicle sector, hasn't followed the straight line of progress that many early forecasts had promised. Projections of widespread EV adoption have been tempered by market realities that remain stubbornly distant from those lofty goals. For the moment, electric trucks are still an outlier in most markets, and the logistics of scaling up have proved more complex than initially imagined.
Yet for Agarwal, this reset in expectations isn't cause for alarm. If anything, it offers a moment to recalibrate. Ashok Leyland, long a pillar of India's commercial vehicle industry, is deliberately pacing itself in the race to electrify. Unlike the headlong rush that has characterised much of the EV sector globally, the Indian automaker wants to be sure before it takes every step.
Part of that measured approach comes from the company's internal confidence. With Switch Mobility, Ashok Leyland's EV subsidiary, and its UK-based electric bus venture, Optare, already in play, there's no pressing need to court outside investors or rush into partnerships. The company approved an equity infusion of Rs 1,200 crore in Switch Mobility in November 2023, claiming to have sufficient funds to support its ventures without scrambling for external capital. And as the valuations in the once white-hot EV space continue to plummet, patience may prove to be a profitable virtue to have.
For the Hinduja Group flagship, profitability and a healthy cash reserve are priorities, allowing the company to invest in future technologies like hydrogen engines without becoming beholden to external financiers. "We're open to partnerships," Agarwal acknowledges, adding—but only if they contribute meaningfully to the company's broader vision. For Ashok Leyland, it is not about chasing the electric dream at any cost. Instead, the focus is on building the foundations for a future that is not only electrified but also sustainable and profitable.
This patient pragmatism sets Ashok Leyland apart in a field where many are scrambling to be the first, fastest, or flashiest. Agarwal's view is simple: the future of mobility will require more than just ambition. It will demand a thoughtfully orchestrated ecosystem, one that balances innovation with infrastructure, vision with viability. As he reflects on what he saw in China, it's clear he isn't just thinking about the next electric truck but about how the entire system—from the power grid to logistics hubs—will need to evolve. And in that sense, his long view may be exactly what's required to navigate the next chapter of trucking's transformation.
Even as the debate over battery swapping versus fixed batteries continues in India, battery technology localisation remains a distant dream; but for Ashok Leyland, battery technology localisation is core to its electrification strategy.
The first priority for Ashok Leyland is to develop the capability to design battery modules and packs using battery cells—a skill set that remains scarce in India. "The first thing that you need to do before you even start thinking of investing in localisation of battery or battery packs is to develop the capability in-house," noted Agarwal, emphasising that very few people here have the expertise. "We are open to investing, but we are determined to follow the right roadmap," he said.