A Niti Aayog report titled ‘Transforming Trucking in India: Pathways to Zero-Emission Truck Deployment’ released on Friday suggests that India’s trucking market is expected to grow over four times by 2050. The report further asks financial institutions to structure more-favorable financing solutions for zero-emission trucks.
As road freight travel continues to grow, the number of trucks is expected to more than quadruple, from 4 million in 2022 to roughly 17 million trucks by 2050, the report said adding that India’s trucking market is expected to grow over 4x by 2050 — fuelling the nation’s economy and transportation emissions.”
70% of India’s freight is carried out through road transport, the report pointed out while highlighting that heavy and medium-duty trucks (HDTs and MDTs) are responsible for most of that road transportation.
According to the report, currently, India transports 4.6 billion tonnes of freight annually, generating a transport demand of 2.2 trillion tonne-kilometers (tonne-km) at the cost of Rs 9.5 lakh crore.
As rising urbanization, population increase, the rise of e-commerce and rising income levels spur the demand for goods, the associated road freight movement is expected to increase to 9.6 trillion tonne-km by 2050, the report said.
“In light of these market trends… lenders and other financial institutions can work to structure more-favorable financing for ZET loans through tailored loan products, better-informed depreciation criteria, and alternative credit evaluations,” it suggested.
Zero-emissions trucks (ZETs) — including battery electric trucks (BETs) and fuel cell electric trucks (FCETs) — do not have tailpipe emissions and have lower operating costs.
The report said that transportation costs are a major driver (62 percent) of overall logistics costs in India, accounting for 14 percent of India’s GDP.
“Since diesel fuel costs account for the overwhelming majority of transportation costs, ZET adoption can dramatically lower associated fuel costs by up to 46 percent over the vehicle’s lifetime, with broad implications for the Indian economy,” it noted.
With cost competitiveness and technology maturity, the report predicted that nearly 9 in 10 trucks sold in 2050 can be ZETs.
The report pitched for leveraging policy intervention to reduce charging costs, including upfront subsidies, electricity tariffs that remove demand charges and/or implement EV-friendly rate structures, and concessional land for building out ZET charging infrastructure.
It also suggested streamlining the infrastructure installation process to minimize the permitting and interconnection processing times for charging infrastructure development to lower charging deployment soft costs.