LNG & EV: Complementary solutions for a cleaner tomorrow

India imported over 7% of the world’s LNG in 2024[1], making it the fourth-largest importer globally. At the same time, EV sales in India grew by 49.25% in 2023[2]. With both technologies competing for the future of clean transportation, the key question is: Which one will India adopt at scale first—LNG or EVs?

India is on the path to greener transportation. However, the journey may not be that simple. EV adoption is rising, supported by government policies and investment in battery technology. However, EVs face major challenges, including high upfront costs, a lack of fast charging stations especially along the highways, and long charging times—notably for commercial vehicles. Amidst the transition to a cleaner future, use of LNG (Liquefied Natural Gas) offers an immediate and practical solution, particularly for a majority of commercial fleet plying long distances. These may include trucks and buses that need quick refuelling and long driving ranges. With India’s goal to reduce oil imports and shift to cleaner fuels, LNG is to act as a stepping stone (or even longer-term alternative to carbon heavy fuels) before large-scale EV adoption becomes possible.

The promise and pitfalls of electric vehicles

There are reasons to believe that LNG will be the stepping stone & an alternative to dirtier fossil fuels. Despite the strong policy push for EV adoption in India, multiple structural and economic challenges hinder its large-scale deployment. A primary concern is infrastructure. India currently has only 12,146 public EV charging stations[3], whereas industry estimates suggest at least 1.32 million will be needed by 2030 to meet demand[4] or more than 100 times of today’s numbers. The lack of a widespread charging network, particularly along long-haul routes, makes EV adoption in logistics and heavy-duty transport impractical under current scenario. It is even a negative for Light Motor Vehicles (LMVs) as more and more people in India are driving longer distances for leisure. Moreover, charging times for EV trucks remain prohibitively long compared to LNG refuelling, causing further operational inefficiencies. In China, the average charging duration for logistics vehicles, buses, and heavy-duty trucks is less than 2 hours[5], whereas in India, with most chargers ranging from 50 to 150 kW, results in longer charging times for large trucks, often far exceeding 2-3 hours.[6] This contrast highlights India's lag in charging infrastructure, making LNG a better alternative for commercial transport soon.

Another concern is of supply chain dependency. Manufacturing an electric vehicle requires six times more minerals than a conventional car, primarily for battery production. China currently processes over 60% of the world’s lithium, cobalt, and nickel, making India’s EV industry highly reliant on Chinese supply chain. This dependency presents risks in terms of cost fluctuations and trade uncertainties. Additionally, the Indian Ministry of Mines has identified 24 out of 33 critical minerals as being at high risk of supply disruptions, further complicating EV manufacturing.[7]

EVs also face an environmental paradox! While they reduce tailpipe emissions, battery production and electricity generation contribute to pollution. India’s power grid remains 70% dependent on coal, meaning EVs (read production of EVs) still have a significant carbon footprint[8].Without a rapid transition to renewable energy, EV adoption alone will not significantly cut transport-related emissions.

In this light, India’s target to double LNG imports by 2030 may get a boost with the recent India-US trade talks over easing trade barriers within the two countries. With the U.S. ramping up natural gas exports in the near future, India will stand to benefit.

Why LNG is the most viable transition & midterm alternative fuel

In contrast, LNG provides a near-term solution that aligns with both economic and environmental goals. The Indian Government is actively expanding LNG infrastructure, starting with 50 refuelling stations along the Golden Quadrilateral with plans to scale up to 1000 stations in the future.[9]. LNG refuelling stations are cost-effective and quick to develop, leveraging existing gas pipeline networks and storage facilities to reduce investment and operational costs. Additionally, refuelling times are comparable to diesel, minimising downtime for fleet operators.

Cost is a major factor driving LNG adoption. LNG is 30-40% cheaper than diesel, offering immediate savings for fleet operators while maintaining similar upfront acquisition costs. Additionally, the environmental benefits of LNG are significant compared to diesel, LNG reduces NOx emissions by 50-60%, particulate matter by 90%, and CO₂ emissions by 15-20%[10]. These reductions make LNG an attractive option for cities battling air pollution and industrial emissions.

Interestingly, LNG’s infrastructure is expanding faster than EV charging networks. Since LNG can leverage existing gas pipeline networks and storage facilities, scaling up adoption is relatively straightforward. The refuelling process is also more efficient—LNG trucks can travel 800-1,200 km per tank, whereas current EV trucks offer only 300-500 km per charge, with significantly longer refuelling times.

Regulatory and Trade Policy Considerations

While LNG adoption presents a viable alternative, policy interventions will be necessary to drive large-scale implementation. To accelerate growth, the government must examine tax exemptions on LNG refuelling stations, provide fleet conversion incentives, and integrate LNG into national transportation energy planning.

The role of international trade policies in shaping India’s LNG market cannot be overlooked. With the U.S. lifting restrictions on LNG exports, supply stability has improved. However, since India relies heavily on imported LNG, long-term dependence could be reduced with the right EV technologies. A strategic shift towards electrification, where feasible, could help mitigate exposure to global LNG price fluctuations. Simultaneously, India must continue investing in renewable energy capacity to support the long-term shift to EVs. Policy frameworks like FAME II and incentives for domestic battery manufacturing will help mitigate EV challenges over time.

LNG & EV are the way forward

India needs to choose a path suitable to its realties to switch to clean transportation. EVs may be the best long-term solution to reduce pollution, but they face big challenges like a lack of charging stations, battery shortages, and power supply issues.

LNG is a practical and affordable option that can quickly lower emissions and fuel costs without requiring major infrastructure changes. Since India must balance economic growth and environmental goals, LNG should be used for all types of vehicles including trucks and buses in the short term. Meanwhile, EVs can expand gradually as charging stations and power sources improve.