Devil's in the diesel, get E-truckin'

With his new AMPSTAR brand of electric commercial vehicles (CVs), Sajjan Jindal wants to recreate a BYD moment in trucking. It’s a great time to rev the engines -- a worldwide diesel squeeze, improved battery tech around fast charging and growing institutional buy-ins and a worldwide policy push. But unless the distortions in India’s customs duties on heavy trucks – the lion’s share of the market -- are ironed out, all efforts to spur localization of E-truck manufacturing will short circuit. Unlike passenger cars, Jindal says he wants to drive solo in CVs and partner with the Chinese to disrupt the market. But others already have. Many of these upstarts may upend his plans by taking advantage of the duty anomaly to flood the market with cheaper imports from the mainland.

Energy transition in the CV industry potentially makes the boom in electric cars look like a sideshow. Everything we buy or use to build – from groceries to milk, cars, courier, consumer goods or cement -- rides on a diesel burning truck at some point. In FY2026, the workhorse fuel accounted for about 82.4% of Indian CV retail sales. They also guzzle 55% of India’s diesel demand and are responsible for 34% of vehicular carbon emissions.

To wean India off its crude oil addiction or make any structural dent to air pollution, electrifying our freight fleets are a no-brainer. Niti Aayog says road freights alone account for more than a quarter of India’s oil-import expenditure. But E-cars or green city buses alone won’t charge the collective imagination for a once-in-a-lifetime EV push: We need to green our highways.


World over, trucking is a low margin business. Owners treat their vehicles as long-term investments, keeping a hawk’s eye on operating costs. E-trucks are expensive. In India, the sticker price for a 55-tonnes plug-in trailer is 2.5 times more than an equivalent diesel rig. Emission control is a noble idea but will not accelerate mass transition. But any new technology that allows a transporter to shave off a few extra bucks will see seamless and unsentimental adoption.

It’s already playing out wherever electricity prices are competitive with diesel and much like the E-car boom, developing economies are turbocharging sales, leapfrogging the US and Europe in their push towards cleaner fuel options.

In India, consumers have remained insulated from any price shocks as the government froze retail prices of fuel at the cost of state refiners who have already lost Rs 18,149 crore last quarter trying to meet domestic demand. Even then, in the last 2 months, there has been exponential YoY sales growth of electric trucks and commercial vehicles as consumers are getting wary of disruptions. With the West Asian conflict widening and attacks on refineries and pipelines in Saudi Arabia and Russia -- production of fuels has been severely curtailed. Crude can fall on a ceasefire headline. Refining capacity and shipping lanes cannot be restored in a quarter. International diesel prices averaged $164.5 a barrel on a free-on-board (FOB) basis in September, nearly twice the level a year earlier. It has eased a bit in October to $158.45/barrel. Diesel cracks—the margin from converting crude oil into diesel—are currently at $50-70/barrel in Singapore, far higher than the long-term average of $16/barrel. This scarcity premium signifies that oil markets are valuing refined diesel significantly higher than the cost of the crude oil used to make it. Earlier this month, even the government gave in and raised ATF and commercial LPG prices. Most see it as a precursor to the inevitable: a long-pending revision in diesel and gasoline at the retail stations.

Higher the price of diesel, the more compelling the commercial logic of electrification becomes, especially for long-haul, predictable closed looped routes. Today, even without any hike, on average, it takes six times more to buy a litre of diesel than a kilowatt/hr of electricity at a public/commercial charging point. The higher upfront price for an E-truck can therefore be paid off in three to four years based on such lower operating costs.

This underlying “total cost of ownership” math gets even more attractive if an asset is used longer – 12,000 kms/month – or double that of a fossil fuel equivalent. Improved battery range has further convinced the early adopters – cement, coal and steel industry end users – to optimise such cost efficiencies.

As Indian policymakers push the pedal for mass adoption through policies like PM E-Drive, a new aggregation platform under Neeti Aayog –PACT or even the stringent fuel economy norms of New Delhi that will effectively outlaw non-electric small trucks starting next year, it becomes imperative to iron out the asymmetrical customs framework that has incentivized rebadging of Chinese trucks by sharp elbowed local players. Currently, completely built units of rigid commercial trucks face a steep 40% import duty, but a fully built 55-tonne trailer is taxed at a mere 10%. Chinese manufacturers seeking to escape the meltdown of their domestic construction industry are targeting overseas markets like ours. Instead of doubling down on localisation, several are playing on this duty arbitrage.

Policies do help and a start can be made by introducing a national nodal body that unpacks bureaucratic gridlocks and removes operational friction points. Next will be streamlining the PM E-Drive subsidies that are today linked with impractical compliance mandates like diesel vehicle-scrapping certificates. Finally, fiscal levers – reduced highway tolls for greener trucks – can further incentive user industries. Alternatively, those charges can also be reimbursed out of the unutilised Rs 500 crore subsidy pool of the PM’s flagship scheme. This slashes the freight rate differential between polluting and plug-in variants by up to 15% without any extra burden on the fiscal while directly encouraging the transporter.

Instead of just subsiding fuel, it makes for a far better strategy to make the commercial logic more viable. Big corporations are already taking advantage of stronger battery packs that tackle range anxiety. Large freight buyers – ecommerce, port operators, FMCG players – should aggregate demand and offer multi-year contracts to logistics companies on using E-vehicles. This in turn, will also boost the financier’s confidence to bankroll the fleet owners or even battery swapping startups.

BYD’s brand-new drivetrain turned the sweepstakes for passenger cars. Chinese commercial vehicles have already seized the moment by electrifying. Around 11% of heavy trucks and a fifth of small trucks sold last year were battery only. India should not pull the plug on E-trucking.