India's freight electrification programme is progressing more slowly than planned, with fewer than 100 heavy electric trucks deployed under the government's Rs. 5 billion (US$ 53.6 million) PM E-Drive scheme, against a target of 5,643 vehicles since the scheme's introduction in 2024, according to senior industry executives.

A Parliamentary Standing Committee report tabled in early 2026 reported "nil achievement" in physical targets for the heavy-duty segment as of January 2026, while the broader EV programme reached 58.6% of its targets. The original deadline for the PM E-Drive scheme, including incentives for electric trucks, was March 31st, 2026. The scheme has since been extended by two years and now covers electric trucks until March 31st, 2028.

For most operators, the economics remain a constraint. A heavy-duty electric truck costs close to Rs. 10 million, compared with Rs. 2.5 million-Rs. 3 million for a diesel equivalent. The scheme's subsidy is capped at approximately Rs. 960,000; however, operators are required to spend Rs. 300,000-Rs. 400,000 on scrappage logistics, documentation, and compliance to access it. This results in a net benefit of Rs. 500,000-Rs. 600,000 against a price gap of nearly Rs. 7 million.

In addition to economics, the scrappage-linked incentive design requires operators to retire older trucks of equal or higher gross vehicle weight before accessing subsidies. In principle, the approach is consistent; however, in practice, it presents challenges in a market where nearly 70% of fleets are owned by driver-cum-operators who may possess ageing assets suitable for scrapping but lack the resources to navigate the scheme's complexity.

The issue is compounded by a mismatch between policy design and fleet realities. Heavy-duty trucks in the 55-ton 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 involves scrapping two lighter trucks to qualify for a single electric replacement.

Electric vehicles accounted for 1.83% of the broader commercial vehicle segment in FY26, with heavy-duty electric trucks representing a small portion of that, while the overall commercial vehicle market grew by 12.5% and the heavy-duty segment expanded by 17.7%.

A policy adjustment with additional complexity

Stakeholders indicate that dealers and operators are required to identify, coordinate, and simultaneously dismantle multiple vehicles. Each vehicle requires separate documentation, logistical arrangements, and associated costs, all to qualify for a single incentive.

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

Other industry participants have raised a broader policy question: whether scrappage should remain a prerequisite, or whether purchase incentives should be decoupled from scrapping obligations to facilitate wider industry participation.

Supply and demand dynamics

On the manufacturing side, activity is increasing. Tata Motors, which holds approximately 49% of the heavy-duty market, has introduced electric trucks across weight categories, including the Prima E.55S, supported by a 250-unit order for steel and cement transport.

Ashok Leyland has committed to developing an electric truck corridor between Chennai and Bengaluru and has increased its capital expenditure to around Rs. 10 billion for a dedicated EV platform. Blue Energy Motors is expanding its capacity and piloting battery-swapping operations on industrial routes.

Current deployments remain concentrated in closed-loop applications such as mining, cement, and port logistics, where fixed routes and high utilisation support total cost of ownership considerations.

Infrastructure and financing gaps

Beyond economic and policy factors, structural barriers remain. Fast-charging infrastructure along key freight corridors is limited, and standard chargers are insufficient for heavy-duty battery requirements.

The absence of a secondary market for used electric trucks continues to discourage smaller operators. Analysts identify FY27 as a potential inflection point, contingent on policy continuity, revised scrappage norms, and the deployment of high-capacity charging networks.

At the operational level, dealers, who play a central role in vehicle replacement, are encountering practical challenges. C.S. Vigneshwar, President of the Federation of Automobile Dealers Associations (FADA), stated that a significant number of end-of-life trucks continue to be dismantled in informal local markets rather than at the authorised scrapping centres mandated under the PM E-Drive scheme.

Many state transport departments, including those with established EV policies, need to expand scrappage infrastructure to ensure a consistent flow of vehicles through formal facilities, Vigneshwar further added.

He further stated that original equipment manufacturers (OEMs) are working to enhance their vehicle scrapping capabilities to support the deployment of heavy-duty electric trucks in FY27. This includes establishing additional scrapping facilities in states where such infrastructure is currently limited.

Vigneshwar noted that "conditions will evolve as the year progresses", attributing this to geopolitical factors that may increase diesel costs and influence the transition towards heavy-duty electric trucks.