E-truck delays? Govt calls Tata, Ashok Leyland, Volvo Eicher for talks

The government launched the PM-E Drive (Electric Drive Revolution in Innovative Vehicle Enhancement) scheme on 1 October 2024 with a budgetary allocation of ₹10,900 crore to bolster the adoption of electric mobility in the country. It promotes the sale of zero-emission vehicles to consumers at a discount, which the government reimburses.

“OEMs (original equipment manufacturers) have not been able to achieve the necessary localization in the e-trucks category of the PM E-Drive scheme," said the first of the two persons cited earlier, both of whom spoke on the condition of anonymity.

The second person said the government has invited truck makers for consultations, to assess the issues that they are facing in sourcing local parts for electric trucks, as the key focus of the scheme was to bolster Indian industry to become competitive with global peers in the automotive sector.

Queries emailed to the ministry of heavy industries, Tata Motors, Volvo Eicher Commercial Vehicles, and Ashok Leyland remained unanswered.

The planned consultations come as no e-truck models have been approved under the marquee e-mobility scheme in the two months since the government announced the guidelines in July. Also, no e-truck sales have been recorded under the scheme in this period, according to the scheme’s dashboard.

Models that are approved for incentives under the scheme are listed on the scheme’s dashboard. However, as of date, no e-truck models have been listed.

In an earlier e-truck consultation with the industry in November last year, a top government official had said that the reason for running the PM E-Drive scheme was to build a localized manufacturing ecosystem.

“The reason why the ministry of heavy industries is handling a topic like trucking is because its departments are in charge of boosting the nation's manufacturing capability. We should not be seen as importing material from our neighbours, and making India into an assembly shop," heavy industries ministry secretary Kamran Rizvi had said earlier, underlining the objective of reducing reliance on imported materials and preventing India from becoming merely an assembly site. Mint reported this development on 14 November 2024.

Back then, truck makers had sought 18 months to comply with the scheme’s localization criteria.

Localization under the PM E-Drive scheme is guided by the phased manufacturing programme (PMP), a list of auto components that manufacturers are allowed to import till a specific cut-off date for each component.

All other components have to be sourced locally.

The PMP is also subject to change according to advancements in the local auto component sector.

Complying with the PMP is mandatory for truck makers to claim incentives under the ₹500 crore corpus allocated towards zero-emission trucks under the scheme. Under the scheme, truck makers will sell their products at a discount, which will later be reimbursed by the government, effectively reducing the upfront cost of purchasing an e-truck for consumers. The scheme plans to incentivise the sales of about 5,600 e-trucks in its run time till FY28.

Mint reported on 13 September that the government may amend the PMP for e-trucks and e-buses under the scheme to allow imports of traction motors laden with rare earth magnets, as automakers could not procure these magnets due to a Chinese export control order in April this year.

The country’s auto industry had sought amendments to the localization criteria of the PM E-Drive scheme as well as the production-linked incentive scheme for automobiles and auto parts (PLI-Auto) in the wake of the rare earth magnet supply crunch.

The government had tasked the Automotive Research Association of India (Arai) to assess the issue and suggest whether any relaxation is needed. The research body suggested that the government relax the PMP guidelines and allow rare earth magnet laden traction motors to be imported temporarily until supply of these magnets resumed.

The scheme provides a reduction in upfront costs in the range of ₹2-9 lakh per truck, for heavier categories of trucks. It only applies to N2 (gross vehicle weight 3.5-12 tonnes) and N3 (gross vehicle weight 12-55 tonnes) categories of e-trucks.

The government’s policy think tank NITI Aayog has also suggested the government take steps to reduce the upfront as well as operational costs of electric trucks. “There has been some progress in electric buses and electric cars, but electric trucks have yet to pick up," said O.P. Agarwal, distinguished fellow, NITI Aayog, in his foreword to the August 2025 report on electric mobility in the country.

The report recommended creating a pool of funds from the public budget and multilateral development banks to provide lower interest loans for procurement of e-trucks, along with a scheme to channel these funds.

The Aayog also noted that long-haul trucking in India was still reliant on diesel-guzzling vehicles. “Out of 834,578 trucks sold in India in 2024, only 6,220 were electric. 95% of these (5,940) were of less than 3.5 tonne capacity," the report said. “Only 280 of these electric trucks sold in India in 2024 were of more than 3.5 ton capacity, which are used for longer hauls."

The electrification of trucks assumes importance as they contribute to about a third of the country's transport sector carbon emissions, while only making up about 3% of the vehicles in the country, said the report. “A significant dent in the reduction of GHG (greenhouse gases) from road transport will not be possible without transitioning long haul trucks to electric," it added.