Halt On Fuel Ban, Penalty On EV Manufacturers: Government's New Route Could Significantly Reduce Air Pollution

Updated: Thursday, July 17, 2025, 15:39 [IST]

Recently, Delhi implemented a ban on older vehicles. However, due to technical limitations and public outcry, the fuel ban has been temporarily paused.

That said, the promotion of electric vehicles has been widely accepted as a positive method to reduce pollution levels, even though some debate exists around the gross pollution levels, which includes the pollution caused during the manufacturing of EVs.

Moreover, the recent decision regarding slashed subsidies to electric two-wheeler manufacturers under the FAME-II and Phased Manufacturing Programme (PMP) is expected to have a negative impact on the adoption of electric two-wheelers across the country.

So, looking at the temporary relaxation on fuel ban, and gradual reduction on subsidies for electric two-wheelers may seem like heading towards a more polluted future. However, we think, this is a better decision as the Government is shifting its focus towards electric trucks and buses.

If you are confused, here is an interesting statistic - Diesel trucks, though constitute just 3% of total vehicles, they are responsible for 42% of transport emissions, according to TERI report. As such, we strongly believe that the government's decision to shift its focus to electrification of trucks are of greater significance to combat air pollution.

Promotion of Electric Trucks

Union Minister HD Kumaraswamy has introduced a new initiative to promote electric trucks under the PM e-Drive scheme. This programme aims to deploy 5,600 e-trucks, offering incentives up to Rs 9.6 lakh per vehicle. To qualify for these benefits, old trucks must be scrapped. The initiative is expected to benefit sectors such as cement and steel, with SAIL planning to purchase 150 e-trucks.

The PM E-DRIVE initiative represents India's first scheme to incentivise electric trucks. The scheme's financial outlay is Rs 10,900 crore over two years (Union Budget 2025-26), aligning with India's goal of reducing vehicular emissions and achieving net-zero by 2070.

Incentives and Benefits for Electric Trucks

Demand incentives will be available for N2 and N3 category electric trucks as per Central Motor Vehicle Rules (CMVR). The N2 category includes trucks with gross vehicles, while incentives apply only to puller trackers in the N3 category. These incentives aim to make electric trucks more affordable by reducing their purchase price upfront.

To ensure reliability, manufacturers will offer a comprehensive warranty backed by the manufacturer. This includes a five-year or 5 lakh kilometre warranty for the truck itself and a five-year or 2.5 lakh kilometre warranty for the vehicle's motor, whichever comes first.

Strategic Move Towards Sustainable Freight Mobility

The scheme is designed to deploy 5,600 e-trucks with incentives reaching up to Rs 9.6 lakh per vehicle. Kumaraswamy described it as "a bold step towards clean, sustainable, and cost-efficient freight mobility." He emphasised that scrapping old trucks is necessary to avail benefits, promoting both emission reduction and fleet renewal.

Sectors like cement, steel, logistics, and ports are expected to gain directly from this scheme. SAIL plans to acquire 150 e-trucks within two years and mandate that 15% of all hired vehicles across its units be electric vehicles (EVs).

Improving Air Quality in Delhi

The scheme allocates support for 1,100 e-trucks in Delhi with a Rs 100 crore budget aimed at improving air quality in the national capital. Kumaraswamy noted that alongside progress in e-two wheelers and e-three wheelers and the tender for India's largest order of 10,900 e-buses, this marks another milestone in India's Viksit Bharat 2047 journey. "The focus will now shift towards electric trucks and buses," said Union Minister H.D. Kumaraswamy during a press briefing on July 16.

Electric trucks align with India's broader goals of decarbonisation and energy security. Moreover, India imports over 85% of its crude oil, making it vulnerable to price shocks (Ministry of Petroleum & Natural Gas - 2024-25 data). As such, transitioning to electric mobility would reduce dependence on volatile international oil markets. Additionally, EV adoption supports renewable energy development as trucks can charge during off-peak hours using surplus solar or wind power.

Challenges and Opportunities Ahead

Despite these advantages, challenges such as range anxiety and limited charging infrastructure along highways remain. However, these issues are not insurmountable. With appropriate policy frameworks like subsidies for fleet conversion or priority lanes for electric trucks, the ecosystem can mature quickly.

DriveSpark Thinks

India stands at a pivotal moment in its transport evolution. While electric cars have made strides on roads already, adopting electric trucks could significantly impact emissions reduction efforts due their substantial contribution currently from diesel counterparts.

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