Comparative Evaluation of Total Cost of Ownership of Battery-Electric and Diesel Trucks in India

Abstract

Whereas battery electric vehicles (BEVs) are on their path to maturity in the light-duty segment, their viability in medium- and heavy-duty applications faces greater skepticism. Furthermore, their higher upfront cost relative to diesel trucks is perceived as even more challenging for less wealthy nations such as India. Here, we undertake a total cost of ownership (TCO) assessment of battery electric trucks (BETs) for four different classes of freight trucks in India using a bottom-up vehicle subsystem level cost estimation. We estimate that, in a scenario in which the incremental upfront cost of BETs relative to a diesel truck is simply the extra cost of the battery pack procured at close to current average international battery pack prices, BETs could have lower TCO, less than 5-year payback, and deliver substantial life cycle cost savings, even without accounting for their environmental benefits. In addition to eliminating tailpipe pollution, they already deliver lower life cycle greenhouse gas emissions based on the current average electricity mix in India. Achieving a scale production that yields lower TCO will, however, require public support over a long maturation phase marked by learning-by-doing externalities and lack of economies of scale when BETs will be costlier. Currently, while there exist multiple types of incentive for light-duty BEVs as well as for cell manufacturing in India, targeted policies for zero emissions trucks are absent; this is a gap that needs to be filled if BETs are to emerge as a serious alternative to diesel trucks in a decade or so.