A spark to drive India’s e-LCV

UPSC Syllabus Topic: GS Paper 3 – Infrastructure – Transportation

Introduction

Light Commercial Vehicles are essential for India’s delivery and logistics system. Despite their wide use, they remained outside fuel efficiency rules for many years. While passenger cars followed corporate average fuel efficiency norms, LCVs operated in a regulatory gap. In July 2025, the Bureau of Energy Efficiency proposed fuel consumption standards for LCVs for 2027–2032, marking a key step toward cleaner transport.

What is Light Commercial Vehicles (LCVs)?

Light Commercial Vehicles (LCVs) are commercial-grade vehicles designed to transport goods or passengers with a maximum gross vehicle weight (GVW) typically not exceeding 3.5 tonnes.

They are commonly used for last-mile delivery, small-scale freight, and urban logistics.

Importance of LCVs in India’s Transport Ecosystem

1. Backbone of last-mile logistics: Most online deliveries depend on small trucks below 3.5 tonnes, making LCVs central to last-mile transport.
2. Large share in goods transport: LCVs accounted for 48% of India’s commercial goods vehicles in 2024, showing their dominance.
3. High daily utilisation: These vehicles operate continuously in urban and semi-urban areas, leading to high fuel use.
4. Major contributor to transport emissions: Because of frequent usage and fleet size, LCVs contribute significantly to road transport emissions.
5. Critical for clean transport goals: Including LCVs under regulation is necessary to meet India’s decarbonisation objectives.

Major Constraints to LCVs in India’s Transport Ecosystem

1. Regulatory gap: LCVs remained outside fuel efficiency norms for years, while passenger cars were regulated under Corporate Average Fuel Efficiency (CAFE) standards.
2. Low electrification: Electric LCVs formed only 2% of the total fleet in 2024, showing very limited adoption.
3. High emissions: The average LCV emitted 147.5 g CO₂/km, which would rise to 150 g CO₂/km without electric vehicles.
4. Limited vehicle options: Manufacturers offer only a few e-LCV models with sub-35 kWh batteries and ranges near 150 km.
5. High upfront cost: Conventional LCVs cost below ₹1 million, while electric versions are priced significantly higher.
6. Price-sensitive demand: Buyers focus on purchase price, which discourages fleet operators from shifting to electric vehicles.
7. Policy inconsistency: The PM E-DRIVE scheme excludes LCVs, and only a few States provide purchase incentives.
8. Weak regulatory push: Relaxed fuel efficiency standards make ICE upgrades cheaper than investing in electrification.
9. Technology dilution: Credits for hybrids and ICE technologies allow compliance without adopting full battery electric LCVs.

Initiative taken for strengthening of LCVs in India’s Transport Ecosystem

1. Fuel consumption standards proposed: In July 2025, the Bureau of Energy Efficiency introduced draft fuel efficiency standards for LCVs. The proposed standards will apply from 2027 to 2032, providing policy certainty.
2. Government rejection of exemption: Automakers sought full exclusion citing price sensitivity and costly ICE technology upgrades. The request was set aside, reflecting commitment to decarbonisation.
3. Evidence-based benchmark: Research by the International Council on Clean Transportation (ICCT) identifies 116.5 g CO₂/km as the cost threshold beyond which vehicle manufacturers find electrification cheaper than upgrading internal combustion engines (ICEs). This provides a scientific basis for designing emission standards that can economically incentivize the adoption of electric light commercial vehicles (e-LCVs).
4. Use of super credit mechanism: Electric LCVs are given super credit multipliers and assigned zero CO₂ value for compliance.
5. Technology-neutral compliance approach: The framework also allows credits for hybrid and select ICE technologies to ease early-stage compliance.

Conclusion

India has taken a major step by bringing LCVs under fuel efficiency regulation. However, real progress depends on strong standards and focused incentives. Making electric LCVs the cheapest compliance option, limiting prolonged hybrid support, and ensuring timely rollout are essential. Without this, India may repeat the passenger car experience, where relaxed norms kept electrification limited to 3%.

Question for practice:

Evaluate how the introduction of fuel efficiency standards for Light Commercial Vehicles can influence India’s transition toward clean and low-carbon transport.

Source: The Hindu