India’s Road to Net Zero: How Zero-Emission Trucks Can Save ₹116 Lakh Crore and Cut Billions in CO₂

India’s trucking sector, despite comprising only 3% of the vehicle fleet, contributes 53% of particulate matter emissions and one-third of transport-related CO₂ emissions. Transitioning to zero-emission trucks (ZETs) could save 2.8–3.8 gigatons of CO₂ by 2050, reducing diesel consumption by 838 billion liters and saving ₹116 lakh crore (US$1.5 trillion) in oil costs. ZETs not only cut emissions but also lower fleet operating expenses, making them a strategic investment. RMI’s resources support this transition through financing, policy development, infrastructure planning, and real-world demonstrations. Key reports provide insights into financial strategies, policy roadmaps, and ecosystem development. Infrastructure and sector-specific deployment strategies are also being developed to accelerate ZET adoption in India.

India’s Road to Net Zero: How Zero-Emission Trucks Can Save ₹116 Lakh Crore and Cut Billions in CO₂

India’s journey toward achieving its net-zero targets by 2070 demands urgent action across sectors, with the trucking industry being a critical area for transformation. Despite comprising only 3% of the country’s vehicle fleet, diesel-powered trucks contribute disproportionately, accounting for 53% of particulate matter (PM) emissions and nearly one-third of transport-related CO₂ emissions. These vehicles not only degrade air quality but also strain India’s energy security, as road freight consumes over 25% of the nation’s annual oil imports. Transitioning to zero-emission trucks (ZETs)—powered by electricity, hydrogen, or other clean fuels—is no longer optional but a strategic necessity to curb emissions, reduce dependency on fossil fuels, and unlock long-term economic benefits.

The Environmental and Economic Imperative

The environmental case for ZETs is compelling. A full-scale shift to clean trucks could deliver cumulative CO₂ savings of 2.8–3.8 gigatons by 2050—equivalent to eliminating 6–8 years of India’s current annual CO₂ emissions. Beyond climate benefits, replacing diesel trucks would drastically reduce PM and nitrogen oxide emissions, improving public health in a country where 14 of the world’s 20 most polluted cities are located.

Economically, ZET adoption promises monumental savings. Diesel trucks currently consume ₹9–10 lakh crore worth of imported oil annually. Transitioning to domestically produced renewable energy could reduce diesel consumption by 838 billion liters by 2050, saving ₹116 lakh crore (US$1.5 trillion) in oil import costs. These savings could be redirected to green infrastructure, healthcare, and education, fostering broader socio-economic development.

Challenges Hindering Adoption

Despite their potential, ZET adoption in India faces several key barriers:

1. High Upfront Costs – Electric and hydrogen trucks cost 2–3 times more than diesel counterparts, deterring fleet owners, particularly small operators in India’s fragmented logistics sector.
2. Infrastructure Gaps – Charging and refueling networks for ZETs are virtually nonexistent outside pilot zones. Long-haul routes lack high-power charging stations, and hydrogen infrastructure remains in its infancy.
3. Policy and Financing Hurdles – Limited subsidies, unclear regulations, and a lack of low-cost financing options slow market readiness.
4. Grid Reliability – India’s electricity grid still relies on 70% coal, raising concerns about the actual environmental benefits of electric trucks unless renewable energy sources dominate the mix.

Pathways to Accelerate the Transition

Overcoming these challenges requires a multi-faceted approach involving policy innovation, financial incentives, infrastructure investments, and industry collaboration.

1. Strengthening Policy Frameworks
The government must set clear ZET sales targets, enforce stricter emission norms for freight, and introduce production-linked incentives for manufacturers. While states like Maharashtra and Delhi have announced electric freight vehicle policies, a national roadmap—aligned with the FAME-III scheme—is crucial. Retrofitting older diesel trucks with emission-control technologies should also be considered as an interim measure.

2. Innovative Financing Models
Financial institutions and NBFCs must design tailored loans, leasing models, and risk-sharing mechanisms to lower upfront costs. Battery-as-a-service (BaaS) models, which separate battery costs (40% of an electric truck’s price) from vehicle ownership, could improve affordability. Green bonds and blended finance tools can also attract private capital.

3. Rapid Infrastructure Deployment
Strategic charging corridor development along major freight routes (e.g., the Delhi-Mumbai Highway) is essential. Solar-powered microgrids at truck hubs can ensure clean energy access. Additionally, pilot hydrogen refueling stations should be established near ports and industrial clusters where hydrogen demand is rising.

4. Pilots and Industry Collaboration
Real-world pilots, such as Tata Motors’ electric truck trials with Amazon and Flipkart, demonstrate feasibility and build operator confidence. Partnerships between OEMs, logistics firms, and energy providers can help address technology gaps and standardize solutions. For example, Ashok Leyland’s collaboration with Reliance Industries on hydrogen trucks highlights the potential of industry-led innovation.

5. Workforce Development
Training drivers and mechanics in ZET maintenance, alongside creating a skilled workforce for battery recycling and hydrogen production, will ensure a just transition. Initiatives like the Skill India Mission could integrate green mobility training modules.

The Road Ahead

India’s ZET transition is not just about replacing diesel trucks but about reimagining its freight ecosystem. Success depends on aligning stakeholder interests—governments, manufacturers, financiers, and fleet operators—toward shared goals. Early adopters, such as e-commerce giants shifting to electric last-mile delivery, showcase ZET viability. Scaling these efforts will require patience, innovation, and policy agility.

By prioritizing zero-emission trucking, India can achieve cleaner air, energy independence, and a competitive edge in the global green economy. The time to act is now—every kilometer driven by a ZET is a step closer to a sustainable future.