India's E-truck Journey: Promise and Policy Hurdles

Indian govt is proposing a PM E-Drive subsidy of ₹5,000 per kWh of battery capacity for electric trucks, which could translate to a significant ₹12.5-20 lakh incentive per e-truck. This ₹500 crore allocation under the PM E-Drive scheme is intended to boost the adoption of e-trucks, which have been designated as a "sunrise sector." To avail this subsidy, a certificate confirming the scrapping of a conventional truck of equal or higher tonnage would be required. Despite these proposed incentives, the e-truck segment is facing sluggish momentum and a significant lack of policy clarity. There has been no visible progress on e-truck incentives under the PM E-Drive scheme in its initial phase, and no subsidies have been disbursed to date. A critical hurdle is the government's delay in notifying localization norms for e-trucks, despite the industry requesting 18 months to comply. This ongoing uncertainty regarding detailed subsidy guidelines and localization rules continues to impede wider adoption in the market. The Indian electric truck market remains nascent, with the majority of electric commercial carriers currently being electric three-wheelers. As of early 2025, Tata Motors, Mahindra, and Switch Mobility (Ashok Leyland) are the clear market leaders, collectively controlling approximately 75% of India's e-truck market alongside VEVC. It should be noted that Tata Motors recently announced a demerger, splitting its passenger and commercial vehicle businesses into two distinct listed entities, with a 1:1 share entitlement ratio. This demerger is projected to be finalized by the third quarter of FY26.