Blue Energy Motors seeks to raise INR 760 crore for EV expansion

Blue Energy Motors seeks $100 million in funding to transition into the electric vehicle market, aiming to capitalize on the growing demand while addressing challenges in financing and cost competitiveness compared to LNG and diesel trucks.

Pune- Blue Energy Motors, a manufacturer of liquefied natural gas (LNG) trucks, is in the process of securing $100 million in funding to support its entry into the electric vehicle (EV) market, according to Anirudh Bhuwalka, CEO of Blue Energy Motors. The fundraising is expected to be completed within the next three to six months.

About a year ago in 2023, Blue Energy Motors raised approximately $10 million in its previous capital raise, with notable investors including FPT Industrial, a division of the Iveco Group that supplies engines for Blue Energy Motors' LNG trucks.

Bhuwalka emphasized the potential of electric trucks in short-haul applications but noted the significant challenge of financing due to higher capital costs compared to LNG and diesel trucks. An electric truck's initial cost is around Rs 1 crore, compared to Rs 60 lakh for an LNG truck and Rs 40 lakh for a diesel truck. Additionally, the payback period for an electric truck is around four years due to higher fuel savings, compared to 18-24 months for an LNG truck.

Bhuwalka highlighted that favorable financing from banks and financial institutions for electric commercial vehicles could significantly boost adoption. Blue Energy Motors sold approximately 400 LNG trucks last year.

This development is significant in the context of India's trucking market, which is projected to grow fourfold from four million trucks in 2022 to 17 million trucks by 2050. While this growth will benefit the nation's economy, it will also increase transportation emissions. According to a recent report by Niti Ayog, LNG presents a compelling alternative to diesel trucks, with LNG heavy-duty vehicle (HDV) sales expected to reach 10% annually by 2032.