May 2025

Electric trucks are becoming cheaper than diesel trucks in lead markets, creating an opportunity to cut oil imports, improve air quality, and increase productivity. This modelling study shows which policies are likely to be most effective in taking advantage of this opportunity. Results are shown for the global market, and for China, India, the USA and Germany.

We find that:

· Regulatory policies, particularly zero-emission vehicle mandates, but also fleet-wide emissions reduction standards, are generally the most effective way to get electric trucks on the road, and are likely to achieve the fastest reduction in zero-emission vehicle costs.

· Price instruments such as purchase subsidies and taxes are less effective on their own, but subsidies can help grow the market for zero-emission vehicles (ZEVs) particularly in the period before cost parity is reached.

· Policies can work well in combination. Early deployment policies, such as city-wide zero-emission zones or ZEV mandates, can be highly effective in creating a growing electric truck market, and can increase the future effectiveness of carbon pricing.

· International coordination on regulatory policies (such as ZEV mandates) in the leading markets of Europe, China, India, Canada, California and other US states could bring forward the cost parity tipping point by up to two and a half years, making the transition to EVs cheaper for other countries all over the world. This is because of the positive feedbacks of learning-by-doing and economies of scale.