India Considers Incentives for Electric Bus and Truck Adoption
Quick Look
India's government is considering a 3-5% interest subvention program to encourage private operators to buy electric buses and trucks, aiming to reduce fossil fuel use and unlock significant private investment in cleaner transport.
AI-generated summary
The government is weighing cheaper loans and other incentives to help private operators buy electric buses and trucks, aiming to cut fossil fuel use and boost cleaner transport. Officials believe the proposed support could make costly EV fleets more affordable and unlock large private investments in commercial electric mobility.
New Delhi: The government is considering an interest subvention programme to encourage adoption of electric buses and trucks in the private sector, said officials in the know.
The proposed scheme, currently in the works, will seek to incentivise 50,000 e-buses and 10,000 e-trucks, by offering an interest subvention of around 3-5%, they said.
"A tapering interest rate subvention of 3-5% is being considered for aiding procurement of e-trucks and e-buses," a senior official told ET. The Centre may earmark ₹5,760 crore for supporting the purchase of e-buses and ₹1,200 crore for e-trucks, he said.
The Ministry of Heavy Industries this week held deliberations with stakeholders, including banks and fleet owners, on the proposal.
The move gains significance amid the West Asia crisis that has driven up oil prices and Prime Minister Narendra Modi's call to reduce consumption of fossil fuels. The government is actively deliberating a fresh boost for commercial electric vehicles through this intervention.
"E-buses and e-trucks require higher investments compared to diesel variants," said an official who attended the meeting.
According to industry estimates, a diesel bus can be purchased for ₹60 lakh, but a comparable e-bus will cost ₹1.2 crore. The cost can be ₹58 lakh for a 55-tonne diesel truck and ₹1.22 crore for a comparable electric truck.
A partial credit guarantee and interest subvention are considered as two components of this proposed scheme. It is estimated that support from the government could potentially unlock ₹70,000-80,000 crore private investment for procuring electric buses and trucks.
Additional incentives in the form of waiver of toll tax and vehicle registration costs are also being deliberated.
The industry is said to have sought infrastructure classification for e-buses and e-trucks, and their inclusion for priority sector lending. A higher loan-to-value (LTV) ratio for e-buses and e-trucks, like diesel variants, is also among the industry's demands.
