Government Gives Major Relief to Electric Truck and Bus Manufacturers

The central government has provided significant relief to companies manufacturing electric trucks and buses under the PM E-Drive scheme. The Ministry of Heavy Industries has amended the Phased Manufacturing Programme (PMP) guidelines, allowing medium-duty electric trucks (N2 category – 3.5 to 12 tonnes) and electric buses to defer the mandatory domestic production of traction motors until March next year.

Earlier, it was mandatory from September 1, 2025, that these vehicles’ traction motors be entirely manufactured in India. According to the revised notification, the rule will now apply from March 1, 2026, for N2 category trucks and March 3, 2026, for electric buses. This move comes as China has suspended the export of magnets, which are crucial for motor production, creating supply challenges for automakers.

Under the PM E-Drive scheme, ₹500 crore has been allocated for electric trucks. Electric trucks weighing 3.5 to 55 tonnes will receive incentives of ₹5,000 per kWh of battery capacity or up to 10% of the vehicle’s ex-factory price, whichever is lower. N2 category trucks are eligible for a maximum subsidy of ₹2.7 lakh, while trucks between 7.5 and 12 tonnes can receive up to ₹3.6 lakh. Subsidies will be available only if a new electric truck is purchased after scrapping an old vehicle.

Electric buses have the highest allocation under the scheme, with ₹4,391 crore earmarked. Buses priced up to ₹2 crore will get ₹10,000 per kWh of battery capacity as subsidy. The maximum subsidy for buses measuring 10–12 metres is ₹35 lakh, for 8–10 metres it is ₹25 lakh, and for 6–8 metres it is ₹20 lakh. The government is also planning incentives to promote domestic magnet production to reduce dependence on Chinese imports.