Ashok Leyland, the largest bus maker in India is anticipating a rise in demand for LNG and electric vehicles for last- and middle-mile transportation from major logistics firms seeking to satisfy their environmental, social, and governance (ESG) goals, as well as from the nation’s e-commerce giants like Amazon and Flipkart.
By the end of FY25, 4,000–5,000 electric and LNG truck sales are anticipated in India, according to company executives. About 500 electric trucks and various alternative fuel combinations, like LNG, are what Ashok Leyland anticipates selling.
“The single most significant challenge in electric trucks is to maintain a stable total cost of ownership. Companies such as Amazon and Flipkart are driving demand for goods transportation to their warehouses to meet their ESG goals, so this year we will also see zero-emission technologies making a small but steady contribution to growing our space in this category,” said Sanjeev Kumar, President, MHCV, Ashok Leyland, speaking on the sidelines of the two-day ‘Mini Expo’ in Mumbai, showcasing its latest innovations in Medium and Heavy Commercial Vehicles (MHCVs).
Currently, the main challenge in the electric truck segment is that an electric truck costs nearly four times as much as a diesel truck, which has an impact on overall operating costs.
For example, Ashok Leyland’s AVTR 55T electric tractor EV, which has a 300kWh LFP battery LFP and a range of 185 kilometres, is priced at Rs 1.39 crore, while the comparable diesel variant costs Rs 45 lakh.
Its longer-range variant, the Ashok Leyland Boss 14T EV, has an LFP battery and a range of 230 km. It costs Rs 1.01 crore, with the diesel variant costing Rs 25 lakh.
Kumar, who shared the customer’s requirement in the category, stated that load providers in this category are looking to meet their ESG compliance, which is driving demand, while firms that require such trucks are also investing in charging infrastructure, with authorised charge point operators facilitating the installation of these chargers.
“We are seeing some interest in electric trucks because our customers are aware that Scania, Ashok Leyland is one of the few to offer a product that is modular and meets global standards, and this is driving good inquiries,” he said.
In terms of the challenges that India’s MHCV market faces, despite year-on-year volume growth of 30.7% in FY22 and 28.7% in FY23, as well as a muted growth of 0.7% in FY24,
Ashok Leyland’s Sharma remains optimistic about the category’s future.
“While I agree that we are sitting on a huge base right now, based on how we have performed this year, we expected it to be flattish last year. However, in the first quarter, the CV industry increased by 10%, exceeding our expectations. We did not expect this to grow at 10%. With the elections completed, the new government has been formed, and tenders are being issued. Business activity has resumed after a pause.” He added that the company has performed well in the first quarter.
“We are quite hopeful in terms of quarter 2 industry may not have seen double-digit growth in CV Industry earlier, and this year it will be low single-digit.”
Emphasising the slowing of the commodity cycle, which is helping the CV industry control costs. Sharma stated, “We are hopeful that lowering commodity costs will also assist OEMs in passing on cost savings to customers, which will help to stimulate demand for EVs and other conventional fuel products with a pricing advantage.”