Strategies for zero-emission truck adoption in India: From assets to processes

Time of India

14 hours ago

Diesel trucks
account for just 3 per cent of the total vehicle fleet in India, yet the trucking industry contributes to around 8 per cent of the total emissions in the country, a figure that could double to 15 per cent by 2050. Recognising the urgency to decarbonise, the government has launched numerous initiatives and schemes to promote
biofuels
,
electric vehicles
and
hydrogen for mobility
. The National Policy on Biofuels of 2018 has set ambitious targets of 5 per cent biodiesel and 20 per cent of ethanol-petrol blending by 2030 and 2025, respectively.
More recently, in 2023, the government launched the National Green Hydrogen Mission to promote hydrogen for the mobility sector. Additionally, through schemes like FAME and PM E-DRIVE, the government is trying to push the industry towards
zero-emission
trucks (ZETs) through battery electric trucks.
As India's freight demand accelerates with urbanisation and economic growth, the question confronting policymakers, manufacturers, and fleet operators is no longer 'why decarbonise,' but 'how to decarbonise in a scalable manner?' There are several options on alternative fuels and decarbonised technologies; however, driving its feasibility and adoption at a large scale needs rethinking.
Going Beyond Diesel: Options and Trade-Offs
The trucking industry is in a conundrum, with multiple alternatives available, such as biofuels, hydrogen-powered vehicles, battery and fuel cell electric vehicles, CNG/LNG/LPG and even synthetic fuels. Each option comes with its own set of advantages and disadvantages.
Biofuels offer modest emissions reduction (at least 20 per cent in comparison to gasoline) but appear to be an interim solution. While they minimize alterations in existing vehicle engine platforms, their adoption is severely limited by the lack of adequate supply of biofuels. Policymakers have to balance biofuel production with food security and land-use changes, restricting the supply of biomass available for biofuel processing.
Additionally, biofuels are being prioritised to decarbonise competing sectors such as aviation and ocean shipping, where electrification holds limited scope.
Hydrogen trucks are currently under trials in India and pilot programs for long-haul and heavier applications. While hydrogen trucks could provide 2-3 times the fuel economy compared to ICEVs, they are intrinsically less efficient than batteries due to conversion losses. Some estimates suggest that energy efficiency of hydrogen vehicles stands at 33 per cent, significantly lower than BEV's 77 per cent.
Additionally, hydrogen trucks are prohibitively expensive, almost six times the purchase price of an ICEV and thrice the operational cost of an diesel truck. A smaller ecosystem, limited pool of engineers, complex manufacturing processes, and reliance on expensive components would continue to push the cost of manufacturing hydrogen vehicles in the medium term.
Battery electric vehicles (BEVs), on the other hand, are witnessing a decline in manufacturing cost, driven by falling battery pack prices. Zero tailpipe emissions, high energy efficiency and technological maturity makes them an ideal choice for achieving ZET in India. However, range anxiety, inadequate charging infrastructure, battery weight, and asset financing are hindering a wider adoption of BEVs.
Achieving TCO Parity to Encourage Alternative Fuels
Technological maturity alone is an insignificant factor in driving customers towards alternative fuel options. In an industry operating at profit margins of as low as 5 per cent, TCO (total cost of ownership) plays a decisive role in purchase decisions. TCO includes purchase price, fuel and maintenance expenses, vehicle uptime, and residual value. Achieving TCO parity between BEVs and ICEVs is important to nudge fleet operators towards zero-emission trucks.
TCO between BEVs and ICEVs can be achieved under the right conditions. While the capital cost of BEVs is higher than ICEVs, their operational costs are significantly lower than ICEVs. This presents an opportunity to fleet operators to achieve TCO parity for BEVs on predictable, fixed route operations with intensive vehicle utilisation. High vehicle utilisation amplifies savings from lower operating costs, allowing fleet owners to compensate for higher capital cost. In India, TCO parity for BEVs can be obtained if a truck travels more than 320 kms per day.
However, sub-optimal utilisation of vehicles which leads to vehicle idling, like delays in loading/unloading and driver shortage, makes BEVs significantly expensive to operate, thereby dampening the case for electrification. This highlights the need to improve productivity and efficiency of trucking operations in India to improve the throughput of the vehicle and maximize the asset uptime.
For instance, adoption of detention and demurrage policies in trucking, similar to the ones that exist in maritime shipping, can help reduce the idling of trucks and improve vehicle utilisation. An increased asset uptime for ZETs would make a viable business case for fleet operators. The shift to ZETs should be viewed not just through the lens of infrastructure development, but as a process improvement challenge that requires systemic reforms and collective action from all stakeholders.
It is worth noting that BEVs themselves face load and time penalties due to heavy battery packs and prolonged charging times. A trade-off between vehicle range and freight tonnage further impacts TCO parity. It calls for establishing a reliable and widely distributed network of charging infrastructure (preferably superchargers) that reduces the need for heavy battery packs while justifying BEV adoption for high utilisation, heavy-tonnage applications.
Building Electric Truck Ecosystem for India
Innovation is a critical enabler for the development of any novel or alternative technology. However, such innovation in alternative fuel technology in India is severely hindered by an over reliance on component imports. Take for instance the EV supply chain. India imports most of the critical components used in manufacturing BEVs, like motors, controllers, BMS slave and master, PDU, HVAC and aggregates. China, that has vast reserves of rare-earth minerals, contributed to India's 30 per cent of auto component imports, totaling $20.3 billion in fiscal year 2022-23.
Vertical integration of the supply chains is an essential prerequisite for the development of innovative clean, modular, cost-effective, and easy to maintain India-centric zero emission trucks. Another benefit of localized innovation could accrue in the development of thermal management systems suited for tropical and subtropical climates. Unless adjusted for the hot temperatures of India, battery performance and lifespan of BEVs can be significantly compromised. Such adaptation is not just a technical adjustment but a critical factor in ensuring the durability and safety of electric trucks in India.
Equally critical is the electrification of India's major freight corridors, such as golden quadrilateral and East-West, North-South corridors. While there exist expensive options like establishing battery swapping stations and overhead electricity lines, the establishment of supercharging EV stations remains the most ideal in the current scenario. A planned rollout of high-capacity supercharging infrastructure along these key highways could promote electrification of the majority of freight movement in India.
A shift in sales paradigm, from product-centric to solution-centric is also imminent as alternative fuels gain traction. Segmenting customers into price-sensitive, performance sensitive and technological trendsetters would help OEMs identify the right fuel technology. Sales function would shift from merely identifying the right tonnage to identifying the right fuel technology based on application, distance and loop system. A bundled proposition, providing route-planning, charging partnerships and performance guarantees would become the distinguishing factor for OEMs.
Commercial vehicles present one of the greatest opportunities for decarbonization in India. Decarbonization can bring some welcome changes in the Indian trucking industry, like fleet modernization, digital transformation, skilled workforce, and transparent contracting. However, there is no single solution to decarbonizing India's commercial vehicle fleet. The future will likely be one of coexistence, with diesel, electric and other clean technologies serving specific applications and use cases. However, the direction is clear: electric vehicles offer the most competitive alternative to diesel vehicles.
It is important to note that India's decarbonization journey must be rooted in its unique context. Vertical integration of supply chains is essential to enable innovation and development of new product offerings. The government can also play an enabling role through financial subsidies, but more importantly through non-financial measures like time-of-use pricing, feebate programmes, green procurement mandates or long-term contracting mandates.
-Debjit Roy is a co-chair of the centre for transportation and logistics and professor at IIM Ahmedabad.
-Shubham is a research associate at the centre for transportation and logistics.
-Sandip Chakrabarti is a co-chair of the centre for transportation and logistics and holds the JSW Chair in Innovation and Public Policy at IIM Ahmedabad.
-Views expressed are personal.