India’s ambitious drive to electrify freight transport is running far behind schedule, with fewer than 100 heavy electric trucks deployed under the government’s ₹500 crore PM E-DRIVE scheme, against a target of 5,643 vehicles and the scheme running since 2024, informed top industry executives.

A Parliamentary Standing Committee report tabled in early 2026 flagged “nil achievement” in physical targets for the heavy-duty segment as of January this year, even as the broader EV programme reached 58.6% of its goals. The original deadline for the PM E-DRIVE scheme, including incentives for electric trucks, was March 31, 2026. The scheme was extended by two years, now covering electric trucks until March 31, 2028

For most operators, the economics are prohibitive. A heavy-duty electric truck costs close to ₹1 crore — compared with ₹25–30 lakh for a diesel equivalent. The scheme’s subsidy is capped at roughly ₹9.6 lakh, but operators must spend ₹3–4 lakh on scrappage logistics, documentation, and compliance just to access it. That leaves a net benefit of ₹5–6 lakh against a price gap of nearly ₹70 lakh.

Also, another aspect beyond the economics is the shortfall is a scrappage-linked incentive design that requires operators to retire older trucks of equal or higher gross vehicle weight before they can access subsidies.

In theory, the logic holds. In practice, it doesn’t: for a market where nearly 70% of fleets are owned by driver-cum-operators who may have ageing assets to scrap but lack the resources to navigate the scheme’s complexity.

The problem is compounded by a mismatch between policy design and fleet reality. Heavy-duty trucks in the 55-tonne category were introduced only around 2018 and remain in active service. “As a result, there are limited vehicles in this segment that are genuinely ready for scrapping,” said Amit Bhat, India Managing Director at the International Council on Clean Transportation (ICCT).

In March 2026, the Ministry of Heavy Industries modified the scheme’s guidelines to allow “aggregation”, permitting operators to pool smaller trucks whose combined gross vehicle weight meets the eligibility threshold. In practice, this means scrapping two lighter trucks to qualify for a single electric replacement.

EVs accounted for just 1.83% of the broader commercial vehicle segment in FY26, and heavy-duty e-trucks remain a sliver of that, despite the overall commercial vehicle market growing 12.5% and the heavy-duty segment expanding 17.7%.

A policy fix with new complications

Stakeholders within the ecosystem assert that dealers and operators are now required to identify, coordinate, and simultaneously dismantle multiple vehicles. Each vehicle necessitates distinct documentation, logistical arrangements, and associated costs, all in order to qualify for a single incentive.

“Further flexibility would be needed to improve access," Bhat of ICCT says, suggesting that permitting any truck within the N2 or N3 vehicle categories to be scrapped for equivalent incentives could help accelerate early adoption.

Another set of voices from the industry says, “The larger policy question now on the table is: should scrappage remain a prerequisite at all, or must purchase incentives be decoupled from scrapping obligations to bring the majority of the industry into the transition?"

Supply is ready; demand isn’t

On the manufacturer side, momentum is building. Tata Motors — which holds roughly 49% of the heavy-duty market, has launched electric trucks across weight categories, including the Prima E.55S, backed by a 250-unit order for steel and cement transport.

Ashok Leyland has committed to an electric truck corridor between Chennai and Bengaluru and raised its capex to around ₹1,000 crore for a dedicated EV platform. Blue Energy Motors is scaling capacity and piloting battery-swapping operations on industrial routes.

Current deployments remain concentrated in closed-loop applications, mining, cement, and port logistics, where fixed routes and high utilisation strengthen the total cost of ownership case.

Infrastructure and financing gaps

Other industry observers say, beyond economics and policy, structural barriers persist. Fast-charging availability along key freight corridors remains limited, and standard chargers are inadequate for heavy-duty battery requirements. The absence of a used electric truck market continues to deter smaller operators from taking the plunge.

Analysts at ICICI Securities, Systematix, and CareEdge Ratings identify FY27 as a potential inflection point — contingent on policy continuity, revised scrappage rules, and the rollout of high-capacity charging networks.

On the ground, dealers who are at the centre of the transition, as they exchange old vehicles for new, are feeling the weight of the transition.

CS Vigneshwar, President of the Federation of Automobile Dealers Associations (FADA), told businessline that a significant number of end-of-life trucks continue to be dismantled in informal local markets rather than at the authorised scrapping centres that the PM E-DRIVE scheme mandates.

Many state transport departments, even those with otherwise strong EV policies, need to build out scrappage infrastructure to channel a steady flow of vehicles through formal facilities, Vighneshwar said.

He further stated that Original Equipment Manufacturers (OEMs) are currently seeking to enhance their capabilities in vehicle scrapping, with the objective of facilitating the deployment of heavy-duty electric trucks in fiscal year 2027. This initiative includes the establishment of additional vehicle scrapping facilities in states where the presence of such centers is currently limited.

Vigheshwar noted that “conditions will evolve as the year progresses", attributing this to geopolitical factors that are poised to increase diesel costs, thereby accelerating the transition to heavy-duty electric trucks.

Published on April 13, 2026