Govt Announces Support for Electric Truck and Bus Makers Under PM E-Drive

By Amit Jangra | Published Date : October 04, 2025

The government extends the deadline for local manufacturing of traction motors in electric trucks and buses by six months to ease supply challenges.

October 2025 – In a move aimed at helping the electric vehicle (EV) industry, the Indian government has offered much-needed relief to electric truck and bus manufacturers under the PM E-Drive scheme. The Ministry of Heavy Industries has relaxed localisation rules related to traction motors, a key component used in electric trucks and buses.

What’s Changed in the PMP Guidelines?

Table of Contents

1. What’s Changed in the PMP Guidelines?

2. Why Was the Rule Changed?

3. PM E-Drive Scheme: Incentives for Commercial EVs

4. What’s Next?

5. Summary

Read More: Best Muhurat 2025: Buy Commercial Vehicles for a Prosperous Start

Previously, the Phased Manufacturing Programme (PMP) guidelines required that, starting September 1, 2025, companies must manufacture traction motors in India for N2 category electric trucks and buses. These motors include several parts like rotors, stators, magnets and cables.

But due to ongoing global supply issues — especially the shortage of magnets from China — the government has decided to extend the timeline. Now, companies can continue importing motors containing magnets until March 2026.

Here’s the new schedule:

• N2 electric trucks must begin local production by March 1, 2026.
• Electric buses must meet the rule by March 3, 2026.

This gives manufacturers an extra six months to prepare for local production.

Why Was the Rule Changed?

The decision came after automakers raised concerns about sourcing magnets. Since China halted exports of rare earth magnets, many companies found it difficult to meet the localisation deadlines.

The extension will allow EV manufacturers to continue production without delays, especially at a time when demand for electric trucks and buses is growing rapidly in India.
PM E-Drive Scheme: Incentives for Commercial EVs

The PM E-Drive scheme is designed to promote EV adoption in India. It offers ₹10,900 crore in total funding for different vehicle types, including two-wheelers, three-wheelers, electric trucks and electric buses.

For Electric Trucks:

• Vehicles with GVW between 3.5 to 55 tonnes are eligible.
• Incentive: ₹5,000 per kWh or 10% of ex-factory price, whichever is lower.
• N2 trucks can get up to ₹2.7 lakh.
• Trucks between 7.5–12 tonnes may get up to ₹3.6 lakh.
• Buyers must scrap an old vehicle and submit a Certificate of Deposit (CD) to claim the benefit.

For Electric Buses:

• Highest allocation of ₹4,391 crore under PM E-Drive.
• Helps deploy 14,028 electric buses for state and public transport use.
• Buses priced up to ₹2 crore are eligible.
• Incentive:

→ ₹10,000 per kWh
→ Up to ₹35 lakh for 10–12m buses
→ Up to ₹25 lakh for 8–10m buses
→ Up to ₹20 lakh for 6–8m buses

What’s Next?

The government is also planning to promote domestic magnet manufacturing. Incentives will be offered to companies that invest in local production of rare earth magnets — essential for EV motors. This step is part of a broader push to reduce dependence on imports, especially from China.

A government official stated:

"The amended PMP guidelines offer a six-month extension for localising traction motors in electric trucks and buses."

Summary

The new relief should make things easier for electric truck and bus makers, helping them keep operations running smoothly. Plus, it’s a step toward making more EV parts right here in India — which could mean more jobs and a healthier economy down the line. It’s really about finding the sweet spot between dealing with today’s supply issues and pushing for a more self-reliant EV industry.

You Might Like: NHAI Introduces QR Code Signboards for Safer Highways

---

Frequently Asked Questions on Commercial Vehicles

What change did the government make under the PM E-Drive scheme?

Ans: The government extended the deadline for local manufacturing of traction motors in electric trucks and buses by six months, allowing continued imports until March 2026.

Why was the deadline extended?

Ans: The extension was made due to supply challenges, especially the shortage of magnets from China, which are crucial for making traction motors.

What incentives are available for electric trucks and buses under PM E-Drive?

Ans: Incentives include financial support based on battery capacity or vehicle price, with subsidies up to ₹3.6 lakh for trucks and ₹35 lakh for electric buses.

How will this change help electric vehicle manufacturers?

Ans: It helps manufacturers avoid production delays, meet growing demand and prepare for domestic motor production, supporting the EV industry’s growth in India.

---

Join us for the latest updates on the Truck Industry -

☞  Facebook 

☞  Instagram

☞  YouTube

☞  Twitter

☞  LinkedIn

☞  Threads

Join Our WhatsApp Channel