Electric Trucks Next Big EV Growth Opportunity, Financing Key to Adoption: Olectra MD

Electric trucks and intercity buses could emerge as the next major growth opportunities for India’s electric vehicle industry, but high upfront costs, inadequate charging infrastructure and limited financing options remain key challenges, according to Olectra Greentech Managing Director Mahesh Babu.

Speaking at the Autocar Professional India EV Conclave 2026 in New Delhi on Tuesday, Babu said electric city buses had demonstrated the commercial viability of electrification, helped by lower operating costs and predictable routes. However, extending these benefits to trucks and intercity buses would require a wider charging network and financing arrangements that reduce the initial financial burden on operators.

“While we are in the bus, we are also entering the truck segment,” Babu said during a panel discussion on scaling India’s EV market. He added that trucks represented a larger opportunity within commercial vehicles because of their greater contribution to diesel consumption.

Olectra has already outlined plans to enter the electric truck market with a locally developed range. In September, Babu had said that the company was preparing to introduce new bus and truck platforms during the third quarter of FY27.

The initial truck range will cover 28-tonne to 55-tonne applications, including tippers and tractor-trailers. The company is also developing manufacturing capacity for approximately 1,200 trucks annually at its Sitarampur facility.

Financing and Charging Key to Electric Truck Adoption

Babu said financing would play an important role in expanding electric truck adoption because of the higher purchase prices compared with diesel vehicles.

“EV needs a longer financing for a lower EMI because of the high cost,” he said.

He explained that longer repayment periods could reduce monthly instalments and improve operators’ cash flows, making electric trucks more attractive despite their higher initial prices.

Babu said charging infrastructure along major transport corridors would also be equally important for electric trucks and intercity buses, unlike city buses, which can rely on dedicated depot charging facilities.

He said Olectra was engaging with financiers to explore suitable funding models for electric commercial vehicles.

“If we crack that, I think a lot of truck operators will jump in,” he said, referring to financing. He added that wider charging availability could further accelerate adoption.

Electric City Buses Show Growing Adoption

Babu said electric city buses had already achieved significant adoption among state transport undertakings (STUs), supported by predictable routes, captive charging infrastructure and favourable total cost of ownership.

He cited approximately 5,000 bus purchases by STUs during the first quarter, of which around 3,700 were electric, representing roughly 74% of the purchases in the segment he referred to.

According to a February 2026 report by CareEdge Ratings, electric buses accounted for approximately 4% of India’s total annual bus registrations in FY25 and the first nine months of FY26. The ratings agency expects electric bus penetration to reach around 13% by FY28, supported by government procurement programmes and expanding charging infrastructure.

Babu said city buses were particularly suited to electrification because they operate on fixed routes and can be charged at depots, making it easier to manage vehicle utilisation and operating expenses.

He also argued that lower operating costs and reliable after-sales support were more important than brand recognition in the commercial vehicle market.

“As long as you demonstrate total cost of ownership, that’s what a brand should stand for,” he said.

The government’s PM-eBus Sewa programme is also supporting the transition. According to the scheme’s official dashboard, 10,000 electric buses had been sanctioned across 115 cities, with more than 1,050 deployed as of October.

Supply Chain and Battery Localisation Remain Challenges

Babu said India’s electric commercial vehicle industry needed to expand its manufacturing and supplier base to meet growing demand while addressing disruptions in raw material availability and shipping.

He noted that while manufacturers were increasing local content, several components and materials continued to depend on overseas supply chains.

Comparing India with China, Babu said the two countries had adopted different approaches to EV manufacturing capacity.

“In India, we cannot do exactly the same because we have limited capital in everything, whether it is industry, government or customers,” he said.

He explained that China’s early investments in manufacturing capacity and integrated supply chains had helped it scale electric vehicle production. India, meanwhile, would need to develop its ecosystem while managing capital more carefully.

Babu identified battery cell manufacturing as one of the most important areas for localisation.

“Without cracking the cell manufacturing it is very difficult to go a long way in EV adoption,” he said.

The Ministry of Heavy Industries has introduced an ₹18,100 crore production-linked incentive scheme to support the development of 50 GWh of domestic advanced chemistry cell manufacturing capacity.

Babu said India would need to develop a deeper supply chain covering battery cells and other components to support future EV growth and reduce dependence on imported technology.

Electric Commercial Vehicles Offer Export Opportunity

Beyond domestic demand, Babu believes Indian manufacturers could find opportunities to export electric buses and trucks, particularly because commercial vehicle purchases are driven more by operating economics and service capabilities than by brand recognition.

He said business-to-business sales could make international expansion easier for commercial vehicle manufacturers than for passenger carmakers, which need to invest more heavily in consumer brand recognition and distribution networks.

Babu cited the international expansion of Chinese electric bus manufacturers as an example of how companies could build overseas businesses through commercial vehicle contracts.

He said Indian manufacturers should explore similar opportunities as domestic products, technology and supply chains mature.

However, he emphasised that localisation would remain essential to improving cost competitiveness and supporting the industry’s long-term growth.