Ashok Leyland, India’s second-largest commercial vehicle manufacturer, is anticipating a significant rise in demand for electric and LNG trucks, especially in last-mile and middle-mile transportation. The surge in interest is largely driven by major e-commerce players like Amazon and Flipkart, as well as large logistics companies aiming to meet their environmental, social, and governance (ESG) objectives, influenced by growing customer expectations.
Company officials estimate that the market for electric and LNG trucks in India could expand to 4,000 to 5,000 units by the close of FY25. Ashok Leyland is projecting sales of around 500 units, including electric trucks and other alternative fuel vehicles like LNG models.
“The biggest challenge with electric trucks is managing a stable total cost of ownership. Companies such as Amazon and Flipkart are pushing for greener transportation to their warehouses to meet ESG goals. This year, we expect zero-emission technologies to play a modest but consistent role in expanding our presence in this segment,” said Sanjeev Kumar, President of Medium and Heavy Commercial Vehicles (MHCV) at Ashok Leyland, during the ‘Mini Expo’ event in Mumbai, which showcased the company’s latest innovations in MHCVs.
One of the main hurdles in the electric truck market is the high cost. Electric trucks currently cost nearly four times as much as their diesel counterparts, significantly impacting operating expenses. For instance, Ashok Leyland’s AVTR 55T electric tractor, equipped with a 300 kWh LFP battery and a range of 185 kilometers, is priced at ₹1.39 crore, while the comparable diesel variant costs ₹45 lakh. The longer-range Ashok Leyland Boss 14T EV, with a 230 km range, is priced at ₹1.01 crore, compared to ₹25 lakh for its diesel counterpart.
Kumar highlighted that the demand for electric trucks is primarily driven by companies looking to meet ESG compliance. These firms are also investing in charging infrastructure, with authorized charge point operators facilitating charger installations.
“We are witnessing growing interest in electric trucks because customers recognize that Ashok Leyland is one of the few brands offering modular products that meet global standards, generating strong inquiries,” Kumar added.
Despite challenges in India’s MHCV market, which saw a 30.7% growth in FY22, 28.7% in FY23, and a more subdued 0.7% growth in FY24, Ashok Leyland remains optimistic about the future. Sharma, a senior executive at Ashok Leyland, expressed confidence in the sector’s potential.
“While we are operating on a large base, our performance this year exceeded expectations, with a 10% growth in the first quarter, surpassing our initial forecasts. With the new government in place and business activities resuming post-election, we are hopeful for continued growth,” Sharma noted.
Sharma also emphasized the slowdown in the commodity cycle, which is aiding the CV industry in controlling costs. “We are optimistic that the reduction in commodity costs will enable OEMs to pass on savings to customers, stimulating demand for electric vehicles and other conventional fuel products by offering a pricing advantage,” he concluded.
