By Jasvir
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Updated On: 02-Dec-2023 10:00 AM
Commercial vehicles are a large part of the Indian economy and infrastructure. This article discusses the future of electric commercial vehicles and the factors affecting it.
Commercial vehicles including three-wheelers, trucks and buses play a crucial role in the transportation sector of India. As of 2023, India is the third-largest automotive market in the world which means the supply and demand for vehicles is always growing.
While the transport sector contributes significantly to India’s economy, it is also responsible for around 14% of carbon emissions. Trucks in India only account for 2% of the volume on the roads but are responsible for around 40% of transport emissions. Which triggers a great need for eco-friendly and sustainable mobility.
Surely electric commercial vehicles will fulfil that need in the future but not without challenges. Below we will discuss the future of electric commercial vehicles in India.
The future of electric commercial vehicles in India looks promising when looking at their supply and demand. The EV market sold 1.23 million units in India during the first 10 months of 2023. But most of the EVs bought belong to either two-wheelers or three wheelers category. Three-wheelers alone accounted for nearly 45% (167,888) of all EV sales in India for Q3.
The demand for electric commercial vehicles such as trucks and buses is still lower compared to these segments. This is because the technology to support heavy duty work applications is still in its early stages.
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However, this might not be the case in future as many leading manufacturing companies including Tata, Mahindra, Ashok Leyland and Eicher are entering the heavy-duty trucks market with their electric models. The main factors that will affect the future of electric commercial vehicles in India are discussed in detail below.
One of the key factors that will contribute greatly to the future of electric commercial vehicles in India is the government schemes. The Indian government has launched many initiatives to promote eco-friendly and sustainable mobility in the country. Some of the most successful Indian government policies are discussed below.
FAME - I
The FAME (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles) scheme was first introduced by the Indian government back in 2015. This phase of the scheme aimed to promote the manufacturing of electric and hybrid vehicles and ensure sustainable growth.
A total of INR 529 crore was spent on this scheme according to the government. The scheme entered phase two in 2019 with the government allocating INR 100 crore in funds for a 3 year period to promote the growth of EVs in the country.
FAME - II
The future of electric commercial vehicles looks even brighter because of the scheme called FAME 2. It is the second phase of the FAME scheme mentioned earlier and it was launched in 2019. The purpose of this scheme is to make electric and hybrid vehicles more affordable for customers.
Indian citizens can avail phase 2 subsidy on electric two wheelers. In the beginning, the amount of subsidy was INR 10,000 per kilowatt hour (kWh) which was increased later to INR 15,000.
From June of this year, the amount of subsidy was reduced to 15% of the price of the electric vehicle. The vehicle making companies and electric vehicle infrastructure providing companies are also approved for subsidies under the FAME - II scheme.
Originally, the FAME 2 scheme was a three year plan with 31st March 2022 being the end of it, but the government decided to extend the scheme till 31st March 2024. It will be the contributing factor in the growth of electric commercial vehicles in the future.
The benefits of EVs are another reason for the flourishing future of electric commercial vehicles in India. Electric CVs have many benefits over traditional fossil fuel-powered vehicles, which is why the future of electric commercial vehicles in India looks even brighter. Some of the benefits of electric CVs are listed below.
These benefits generate more demand for electric commercial vehicles. A combination of both government schemes and the benefits of electric CVs will ensure a hike in the sales of electric vehicles in upcoming years.
Electric vehicle manufacturers will be the key to success in the future of electric commercial vehicles. As mentioned earlier, the government is incentivising OEMs (Original Equipment Manufacturers) to promote sustainable mobility.
This has led to a growth in the supply of EVs from not only the leading OEMs but also new OEMs. Manufacturing companies are making significant efforts to launch the best quality products to meet work requirements.
Many companies in India manufacture electric vehicles but not all of them meet the quality desired by the customers. That is why we made a list of the best electric CVS. Some of the best electric commercial vehicles available in India for purchase are listed below.
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In conclusion, the future of electric commercial vehicles in India looks promising even if there are many challenges. Electric commercial vehicles such as buses and three-wheelers have already accomplished significant feats but the trucking industry is yet to grow. India’s last-mile mobility sector is the only truck sector that has grown in the electric market.