E-Truck Adoption Set to Rise with PM e-DRIVE for Electric Trucks, Says ICRA

India’s electric truck segment—currently witnessing negligible adoption—is likely to see a significant uptick, reaching around 2% penetration by the end of FY2026, according to credits rating agency ICRA. The agency attributes this expected growth to the recently launched PM E-Drive scheme, which aims to catalyse electrification in the medium- and heavy-duty truck categories.

In its latest report on the Indian commercial vehicle industry, ICRA notes that high upfront costs have been a key roadblock in the electrification of trucks. However, the introduction of targeted demand incentives under the new government scheme is likely to lower procurement costs by 8–10%, making e-trucks more accessible to buyers.

Formally launched by the Ministry of Heavy Industries (MHI) on July 10, 2025, the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-Drive) scheme sets aside ₹500 crore in procurement assistance to support the sale of over 5,600 electric trucks in FY2026.

Applicable to trucks in the N2 (3.5–12 tonnes GVW) and N3 (12–55 tonnes GVW) categories, the scheme offers varying incentives depending on the gross vehicle weight. To qualify, e-trucks must meet specific performance criteria including minimum range, energy efficiency, top speed, acceleration, and gradeability.

ICRA points out that while the e-truck ecosystem still faces several operational challenges—including low localisation of components, dependency on imported rare earth materials, and underdeveloped charging infrastructure—the scheme is expected to unlock long-term benefits. These include cleaner and more efficient goods transport, as well as a notable reduction in Total Cost of Ownership (TCO). Post-incentives, e-trucks are expected to offer a 15–20% cost advantage over their diesel counterparts.

The report also highlights the role of ongoing technological improvements that have enabled electric trucks to better meet heavy-duty operational requirements, such as higher torque and longer range. With the rollout of this scheme and planned investments in charging and testing infrastructure, ICRA believes the industry is positioned for a gradual but sustained transition toward electric mobility in the freight segment.