India’s increased focus on electric mobility is set to transform its transportation and energy sectors. Leading this movement is the National Highway for Electric Vehicles (NHEV), an e-highway pilot programme, which aims to upgrade the country’s national highways and expressways into electric highways (e-highways), establishing a 5,500km e-highway network by 2027. The programme is not a standalone mobility project, but serves as an umbrella initiative that seeks to develop charging infrastructure, deploy a fleet of electric trucks and buses and create world-class e-highway infrastructure capable of providing an automatic backup within 30 minutes in case of vehicle shutdown.

The development of e-highways must now take centre stage to achieve key national objectives, such as bringing down logistics costs, decarbonising surface transport and reducing the oil import bill. Financing such an ambitious and capital-intensive project requires significant capital expenditure, making private participation crucial. The programme is being funded through a hybrid public-private partnership (PPP) model, known as annuity hybrid e-mobility (AHEM).

The project has made significant progress in recent years, including trials on three pilot corridors – Delhi-Agra (Yamuna Expressway in November-December 2020), Delhi–Jaipur (NH-48 in September-December 2022) and Chennai–Trichy (NH-179B in September-October 2024).

Progress so far

The initial phase of the pilot was implemented along the Jaipur-Delhi-Agra corridor, covering 500km. Following its success, the scale of the programme was expanded to 5,500km across India, upgrading highways from Delhi to Kanyakumari via the Mumbai and Kolkata corridors. The project is envisioned as India’s first e-highway network, setting a benchmark by defining national standards and specifications.

Under the initiative, rigorous technical trials have been conducted to validate the project’s feasibility and efficiency. These trials involved real vehicles, chargers, networks and stakeholders, ensuring the infrastructure meets operational demands not just in theory but also in practice. As a first step towards full-scale implementation, the pilot has outlined specifications, financing models and a revenue framework for charging stations, elements that were previously undefined.

Unlike petrol pumps, which have well-established financing and operational frameworks, EV charging infrastructure initially lacked such clarity. Therefore, one of the key objectives of the pilot was to demonstrate the infrastructure’s viability and attract investor interest. For instance, NHEV proposed easing compliance requirements for charging infrastructure. In line with this, the Ministry of Power provided clarity that no licence is required to establish EV charging stations of a similar scale to petrol pumps. Consequently, there is no official licence requirement to own, build and operate a charging station, facilitating easier and faster adoption by investors.

Under the initiative, charging stations are envisioned as fully green facilities, offering diverse energy sources including electric charging and hydrogen dispensing, and ensuring compatibility with emerging technologies.

In Gurugram, two prototype NHEV stations have already been established. These are India’s largest charging facilities with 100 EV chargers each (75AC and 25DC). These stations are operating at a 72 per cent utilisation level, with investments expected to break even within 36months.

Initial trials under the programme have yielded encouraging results. For instance, a six seater vehicle travelling from Delhi to Jaipur costs Rs 12,000-Rs 15,000, whereas an electric taxi covers the same distance in approximately Rs 4,200. Similarly, an e-bus completes the same journey forRs 350-400, compared toRs 1,200-Rs 1,500 for a Volvo bus, highlighting the advantages of e-mobility and e-highways. Interestingly, in the recently conducted third trial run, electric trucks were tested for the logistics sector and the results are awaited.

Financing the electric future

Under AHEM, a PPP framework has been designed to attract a diverse set of investors. Under the framework, 30per cent of charging stations are earmarked for petroleum and power PSUs, another 30per cent for private companies and the remaining for private investors such as family offices and individuals.

Over the past decade in this space, charging infrastructure in India has averaged 3-5per cent utilisation levels which has led to the break-even point of these assets reaching around 45 years. In contrast, NHEV targets 30per cent utilisation for each component and a break-even point in threeyears laying a clear return on investment for investors.

The total cost of upgrading 5,500 km of national highways and expressways into e-highways is approximately Rs 50 billion. In a significant achievement, HDFC Bank, NITIAayog and NHEV have partnered to develop an innovative financing instrument. Under this arrangement, HDFC Bank will extend a credit facility of Rs36.72billion. A key feature of this instrument is a 12-month moratorium on repayments during the construction period. Additionally, Rs13.28billion is planned to be raised through sovereign or green bonds, offering a lower cost of capital.

Additionally, a blended financing instrument of Rs 5 billion under AHEM has been earmarked by NHEV for viability gap funding. Further, the PME-Drive scheme has extended its scope to include e-trucks, with an allocation of Rs5billion. These funding initiatives aim to incentivise truck manufacturers and ensure viability during the initial phase of production.

Collective action needed

It is essential to bring together all stakeholders with a commercial interest in the project, including lessees such as cement manufacturers currently using diesel trucks, entities owning these trucks, logistics fleet operators, equipment suppliers, charging infrastructure owners and EV manufacturers. Further, a seamless partnering contract must be established among these parties for at least 10 years, alongside the packaging of these e-highways into profitable green assets for investors on a PPP basis.

These stakeholders must collaborate throughout the trial phase by conducting joint trials and showcasing the benefits to key parties who will ultimately utilise these trucks. These include cement operators such as Ultratech and Adani, who deploy fleets of thousands of diesel trucks. A commitment from such large players will drive the demand by providing reassurance to lenders, such as HDFC, for funding the procurement of these vehicles and infrastructure development.

Future outlook

Driven by innovative financing models, rigorous technical trials and active stakeholder collaboration, India is well on its way to developing a world class e-highway network across the country. Supportive government policies are expected to further drive the programme’s progress.

Under the Union Budget 2025-26, the government announced that each infrastructure-related ministry will roll out a three-year pipeline of projects under the PPP model. Moreover, the states are being provided with an interest-free 50-year loan by the centre. In line with such initiatives, NHEV presents a potential investment opportunity. Owing to these favourable developments, the target for completing the 5,500km e-highway network, initially set for 2030, has been preponed to 2027.

Electrifying highways will be a key enabler in achieving India’s broader goals, including reducing logistics costs from 14 per cent to 9per cent of GDP and cutting oil import dependence to 30per cent. w

Based on a presentation by Abhijeet Sinha, Technocrat – Ease of Doing Business, and Programme Director, NHEV