Centre offers subsidy on electric trucks under PM E-Drive scheme

.

The Ministry of Heavy Industries has on July 11 launched a maiden subsidy scheme for electric trucks at an outlay of Rs 500 crore - under the PM E-DRIVE scheme - in an effort to encourage green mobility in the heavy vehicle segment, aiming to support the deployment of nearly 5,600 e-trucks across India.

Within the scheme, a dedicated provision for 1,100 e-trucks - registered in Delhi - has been made at an estimated outlay of Rs 100 crore, aimed at addressing the capital’s serious air quality challenges. In order to qualify for the incentives, scrapping of old, polluting trucks has been made mandatory, ensuring a dual benefit of modernising India's heavy vehicle fleet and lower emissions.

To promote affordability, the incentive amount will depend on the gross vehicle weight (GVW) of the electric truck, with the maximum incentive set at Rs 9.6 lakh per vehicle. These incentives will be offered as an upfront reduction in the purchase price and reimbursed to OEMs via the PM E-DRIVE portal on a first-come, first-served basis.

Also Read: HD Kumaraswamy says Rs 1,345-crore incentive scheme to make rare earth magnets in India soon

Key sectors set to benefit include the cement industry, ports, steel, and the logistics sector. Several leading OEMs such as Volvo Eicher, Tata Motors, and Ashok Leyland are already engaged in manufacturing electric trucks in India.

“Diesel trucks, though constituting only 3 percent of the total vehicle population, contribute to 42 percent of transport-related greenhouse gas emissions and significantly worsen air pollution. This pioneering scheme, guided by the visionary leadership of Prime Minister Narendra Modi, represents India’s first dedicated support for electric trucks. It will drive our nation toward sustainable freight mobility, a cleaner future, and the realization of Viksit Bharat by 2047, in alignment with our net-zero emissions goal by 2070,” said HD Kumaraswamy, Minister for Heavy Industries.

“Alongside the progress in electric two and three wheelers, and the tender for 10,900 e-buses (India’s largest single tender), this marks another milestone in our Viksit Bharat 2047 journey," the minister added.

Under the scheme, demand incentives will be extended to N2 and N3 category electric trucks, as defined under the Central Motor Vehicle Rules (CMVR). The N2 category includes trucks with a GVW above 3.5 tonnes and up to 12 tonnes. The N3 category covers trucks with GVW exceeding 12 tonnes and up to 55 tonnes. In the case of articulated vehicles, incentives will apply only to the puller tractor of the N3 category.

To ensure reliability and performance, the scheme mandates comprehensive manufacturer-backed warranties. “The battery must be covered under a warranty for five years or 5 lakh kilometres, whichever is earlier. The vehicle and motor must have a warranty of five years or 2.5 lakh kilometres, whichever is earlier,” the government said.

Also Read: Critical minerals central to India-Australia partnership, defence in focus too: Austrade commissioner

The Union Minister said Steel Authority of India (SAIL) has committed to procure 150 e-trucks over the next two years for deployment across multiple locations. Additionally, SAIL has set an internal target to ensure that at least 15 percent of all vehicles hired across its units are electric.

By extending incentives to e-trucks, the scheme aims to reduce operational costs for transporters, encourage clean energy adoption in the heavy vehicle segment, and enhance air quality in urban and industrial regions bringing India closer to a sustainable, low-carbon future.

The subsidies for e-trucks will be a part of the PM E-Drive scheme, which replaced the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME) scheme and the temporary Electric Mobility Promotion Scheme (EMPS). PM E-Drive began on October 1, 2024, and is set to expire on March 31, 2026, unless extended. Officials told Moneycontrol that the PM E-Drive scheme could be extended if subsidy funds remain unused.

While the incentives for two-wheelers, three-wheelers, and buses were rolled out last year, e-ambulances, and incentives for charging infrastructure have been awaiting guidelines. The framework on subsidies for e-trucks were announced on July 11. Meanwhile, the guidelines for charging infrastructure is being formulated by the Ministry of Power.

Under the scheme, demand incentives worth Rs 3,679 crore have been allocated for electric two-wheelers, three-wheelers, ambulances and trucks, while Rs 7,171 crore has been set aside to boost the adoption of electric buses, improve public charging infrastructure and upgrade testing infrastructure.

The target is to support 24.79 lakh electric two-wheelers, 3.16 lakh three-wheelers and 14,028 buses and trucks, as well as 88,500 electric vehicle charging sites.