Ashok Leyland Sees Rising Demand for Electric and LNG Trucks

Key Highlights:

• Ashok Leyland sees growing demand for electric and LNG trucks from e-commerce and logistics companies.
• India's electric and LNG truck market could reach 5,000 units this year.
• High costs of electric trucks remain a challenge, with prices nearly four times higher than diesel trucks.
• Ashok Leyland aims to sell 500 electric and LNG trucks this year.
• Despite market challenges, Ashok Leyland is optimistic about the future of commercial vehicles in India.

Ashok Leyland, India's second largest CV manufacturer, is seeing a surge in demand for electric and LNG trucks in last- and middle-mile transportation from e-commerce operators such as Amazon and Flipkart, as well as huge logistics organizations seeking to achieve ESG targets.

Challenges in Electric Truck Adoption

"The single most significant challenge in electric trucks is to maintain a stable total cost of ownership. Companies like Amazon and Flipkart are boosting demand to achieve ESG targets. So, this year, we expect zero-emission technology to make a small but steady contribution to our growing market in this category," said Sanjeev Kumar, President, MHCV, Ashok Leyland, speaking on the sidelines of the two-day 'Mini Expo' in Mumbai, which featured the company's latest innovations in Medium and Heavy Commercial Vehicles (MHCVs).

Currently, the primary problem in the electric truck segment is that an electric truck costs approximately four times more than a diesel truck, which affects overall operating costs.

For example, the Ashok Leyland AVTR 55T electric tractor EV, which costs Rs 1.39 crore, is nearly four times the price of its diesel counterpart at Rs 45 lakh. Similarly, the Ashok Leyland Boss 14T EV features an LFP battery, a 230-kilometer range, and costs Rs 1.01 crore. However, the diesel model costs only Rs 25 lakh.

Kumar, who revealed client requirements for the category, added that buyers want to ensure their ESG compliance. Meanwhile, businesses that require such trucks are investing in charging infrastructure, with authorized charge station operators enabling charger installation.

Market Growth and Company Expectations

According to company officials, India's electric and LNG truck industry is forecast to reach 4,000 to 5,000 units by the end of this fiscal year. This year, Ashok Leyland intends to sell approximately 500 electric trucks, as well as those powered by alternative fuels like as LNG.

Industry Growth and Future Outlook

"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," according to him.

In terms of the problems that India's MHCV market faces, growth fell to 0.7% in FY24, down from 30.7% in FY22 and 28.7% in FY23.

However, Sharma remains positive about the category's future.
"We expected it to be flattish last year. However, in the first quarter, the CV industry grew by 10%, exceeding our forecasts. With the elections done, a new government has been established, and tenders are being released. Following a break, business activity has resumed."

Sharma noted that "lower commodity prices are assisting the CV sector in controlling costs. 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."

Also Read: Ashok Leyland Hosts 'Mini Expo' in Mumbai

CMV360 Says

Ashok Leyland's efforts to push for electric and LNG trucks reflect the broader industry trend toward sustainable transportation. While the high price of electric trucks is a hurdle, big companies' focus on meeting environmental goals could boost their adoption. 

As the market develops and prices potentially drop, these trucks could become more affordable for a wider range of businesses.