New Delhi: India’s leading electric bus and truck makers are planning to ask for a one-year extension on exemptions to import rare earth magnet motors — that are critical for electric vehicles (EVs)—under a central government scheme, three executives directly aware of the development said.
According to the executives, who spoke on the condition of anonymity, manufacturers may seek an import relaxation till March 2027 under the ₹10,900-crore PM-E Drive scheme.
The earlier deadline for e-trucks and e-buses to switch to locally manufactured rare earth magnet motors was March 2026, which was in turn extended from 1 September 2025.
The extension is being sought as supply disruptions persist in imports, while local production of rare earth magnets and alternative motor technologies is expected to take another one to two years.
Manufacturers such as Tata Motors, Ashok Leyland, Eka Mobility and Montra Electric are deliberating on sending a request to the ministry of heavy industries (MHI) to extend the import deadline, the executives said.
A formal outreach to the government is expected in the next few weeks. “A formal communication hasn’t been sent to the government yet on this, but discussions are ongoing within Siam (Society of Indian Automobile Manufacturers) for this,” said the first executive.
Such a request would suggest that the recent thaw in relations with China has not materially resolved the issues surrounding rare earth magnets, with the country's top automakers still scrambling to find a way out of the crisis eight months after it began in April.
The demand for such an extension will come just after the conclusion of the country's largest electric bus tender of 10,900 buses last week which saw companies like PMI Electro Mobility, Eka Mobility and Olectra Greentech win big orders.
Two electric bus and truck manufacturers—Eka Mobility and Montra Electric—confirmed to Mint that the discussions are ongoing. A spokesperson for Pune-based Eka Mobility said there is a need for extension of the deadline for such components because of the challenging supply chain issues even as industry rushes to fulfil demand for EVs in the country.
“The rare earth magnet supply situation remains challenging. Import restrictions from China continue and, as a result, many OEMs are facing order backlogs. Several of these orders are linked to new tenders that the industry has already participated in, so this relaxation is important simply to ensure continuity of supply and smooth execution of committed orders,” the spokesperson said.
The spokesperson added that changing a motor configuration or switching suppliers cannot be done quickly. “Developing and industrializing alternatives to rare-earth magnet topologies also involve significant R&D, testing, and validation, which typically takes at least two years before they can be introduced into the supply chain at scale.”
Montra Electric chief business officer P.V. Satyanarayana told Mint that OEMs are discussing additional relief from localization rules.
“As an OEM, we don't have an issue if the part is available, because it will take some time for the supply chain to gear up and actually make some of the components in India, which is known to the industry and the government. I think that is where some considerations are happening,” he said, adding that challenges that the industry faces are presented to the ministry through Siam.
Queries sent to Siam, ministry of heavy industries, Tata Motors, Ashok Leyland, PMI Electro Mobility, Olectra Greentech, and JBM, among others, on 26 December remained unanswered till press time.
The PM E Drive scheme
About half of the PM E Drive scheme’s ₹10,900-crore outlay is dedicated to electric trucks and buses, with ₹4,391 crore earmarked for electric buses and ₹500 crore for clean trucks.
The scheme has allocated a cumulative ₹4,891 crore towards subsidizing the cost of more than 14,000 e-buses and 5,500 e-trucks, with each e-bus getting a subsidy of ₹20-35 lakh, and each e-truck getting ₹2-9 lakh.
Under the scheme, manufacturers must comply with localization conditions outlined in the phased manufacturing programme, which lists components eligible for import to ensure the domestic auto parts ecosystem develops, aligned with Prime Minister Narendra Modi’s vision of self-reliance.
Demand for such electric trucks and buses have seen a strong rise in 2025. Between January and December, sales of electric buses grew 20% (to 4,335 units) compared to last year while sales of electric heavy and medium goods vehicles grew 147% to 555 units.
In April, China restricted the exports of heavy rare earth magnets used in motors of electric trucks and buses. While no relaxation was given for localization rules to two wheeler and three wheeler makers under the scheme, the government had allowed a special relief for e-bus and e-truck makers.
Mint reported on 13 September that the government’s decision to allow relief only for electric trucks and buses was based on a recommendation from the testing agency Automotive Research Association of India (ARAI), which was tasked in July to figure out how to provide relief under the scheme.
Some domain experts said that electric truck and bus makers losing out on the PM E-Drive scheme due to time-constraints could lead to an increase in operation costs for operators.
“Currently, the upfront cost of e-trucks, for instance, is capped to be reduced by ~ ₹9.6 lakh under the PM E-Drive scheme. Any disruption or withdrawal of this demand incentive would raise upfront costs, weaken TCO viability, and could force logistics operators to reassess e-truck adoption and pricing strategies," said Deepali Thakur, senior technical manager at Smart Freight Centre India, a think tank.