PM E-Drive Scheme to Give 6-Month Relief to EV Truck and Bus Makers

By Jony Shekhawat | Published Date : September 19, 2025

The government offers six-month relief to EV bus and truck makers amid a rare-earth material shortage.

India’s EV sector is facing supply challenges due to a shortage of heavy rare-earth materials needed for electric motors. The situation has worsened after China put a new export licensing system in place, slowing down approvals and deliveries for Indian manufacturers. Now, the government is considering a relief measure that could allow electric bus and electric truck makers to import fully assembled motors for six months under the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-Drive) scheme, which has a total budget of Rs 10,900 crore.

Which Companies Will Benefit?

Table Of Contents

1. Which Companies Will Benefit?

2. 2-Wheeler and 3-Wheeler Makers Excluded

3. Why the Relief Is Needed

4. Focus of the PM E-Drive Scheme

5. Six-Month Temporary Relief

6. Impact on the Commercial Vehicle Market

The government’s temporary exemption gives major EV makers like Olectra Greentech, Propel, and PMI Electro Mobility a chance to continue production without delays. Electric buses and trucks will get extended support, keeping fleets of electric trucks, mini trucks, pickups, and buses running efficiently. They can now import fully assembled motors with heavy rare-earth materials without any delays.

2-Wheeler and 3-Wheeler Makers Excluded

The relief is only for electric bus and truck manufacturers. Two-wheeler and three-wheeler companies, like Ola Electric and Bajaj Auto, already use low rare-earth or ferrite-based motors and don’t require additional exemptions.

Why the Relief Is Needed

Electric buses and trucks in India heavily depend on rare-earth magnets from China. While a conventional ICE vehicle uses about 100 grams of rare-earth magnets, an electric vehicle requires around 3 kilograms, and a bus may need 7–30 kilograms. Since China controls roughly 70% of global rare-earth mining and 90% of magnet production, the supply chain for India’s EV sector is under pressure. This temporary relief is intended to ease these supply bottlenecks.

Focus of the PM E-Drive Scheme

The PM E-Drive scheme mainly targets electric buses and trucks. The government plans to release a major tender for 10,000 electric buses soon. Out of the full budget, Rs 4,391 crore goes to electric buses and ₹500 crore to clean trucks. Support for two- and three-wheelers is limited to March 2026, but buses and trucks will benefit from aid until March 2028.

Six-Month Temporary Relief

The relief period is limited to six months, after which supply from China is expected to normalize or domestic manufacturing and new technologies will start meeting demand. In line with this, the government is also launching a Rare Earth Magnet Manufacturing Program worth over ₹5,000 crore. This initiative will produce around 6,000 MT of permanent magnets annually within India, reducing reliance on imports.

Impact on the Commercial Vehicle Market

The six-month exemption is a major support for companies making electric trucks, buses, mini trucks, and pickups, allowing production to continue without disruption. It also highlights the government’s efforts to grow India’s EV ecosystem and encourage cleaner transport adoption.

Also Read: Blue Energy Motors Secures $50M to Drive Sustainable Trucking

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Frequently Asked Questions on Commercial Vehicles

Q1. What are the common types of commercial vehicles in India?

Ans. India has a wide range of commercial vehicles, including trucks, mini trucks, pickups, buses, tipper trucks, and trailers, to serve goods transport and passenger services across cities and rural areas.

Q2. How can businesses choose the right truck or bus for their fleet?

Ans. Businesses should consider load capacity, fuel type, route type, and maintenance costs before selecting trucks, mini trucks, pickups, or buses to ensure efficiency and cost-effectiveness.

Q3. What financing options are available for buying commercial vehicles?

Ans. Most manufacturers and banks offer loans, EMIs, and leasing options for commercial vehicles, making it easier for small and large businesses to buy trucks, pickups, mini trucks, and buses.

Q4. How often should commercial trucks and buses undergo maintenance?

Ans. Maintenance depends on usage, but generally, trucks, mini trucks, and buses should have routine servicing every 5,000–10,000 km, and major checks annually to ensure safety and reliability.

Q5. Are mini trucks and pickups suitable for last-mile delivery?

Ans. Yes, mini trucks and pickups are ideal for urban and semi-urban deliveries because they are easy to maneuver, cost-effective, and can carry moderate loads efficiently.

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