Tata Motors, Volvo Eicher, Murugappa inch towards e-truck sops on rare-earth norm respite
PM E-Drive, the government's flagship EV subsidy scheme, was set to lapse in March 2026, but a lack of disbursals in the e-bus and e-truck segments, as well as zero disbursals for electric and hybrid ambulances, led to a two-year extension for these vehicle segments.
New Delhi: India’s push to electrify its heaviest freight movers is finally gathering pace. The Murugappa Group’s electric-truck arm IPLTech Electric Pvt Ltd will shortly secure the localization and homologation approvals from testing agencies under the ₹10,900 crore PM E-Drive scheme, as Tata Motors Ltd and Volvo Eicher Commercial Vehicles (VECV) are slated to soon start testing their e-trucks, marking the next step for disbursals under India’s marquee electric vehicle incentive scheme, two people aware of the development said.
Localisation refers to norms for using India-made components, while homologation is the mandatory testing and certification for sales.
PM E-Drive, the government's flagship EV subsidy scheme, was set to lapse in March 2026, but a lack of disbursals in the e-bus and e-truck segments, as well as zero disbursals for electric and hybrid ambulances, led to a two-year extension for these vehicle segments. Mint has earlier reported that truckmakers faced a crisis of scale and had trouble meeting localization standards under the scheme.
The PM E-Drive scheme has allocated ₹500 crore towards reducing the cost of purchasing more than 5,600 medium and heavy-duty e-trucks—those with a gross value weight of over 3.5 tonnes—by FY28. This includes N2 and N3 category trucks.
E-trucks were included in the scheme as a sunrise sector because the diesel-guzzling freight movers contribute about a third to the country's vehicular carbon emissions, even as they comprise only about 3% of the vehicles.
“IPLTech has submitted its product for testing, and is likely to get the necessary approvals soon. Maybe in the coming weeks," said one of the people cited above, on the condition of anonymity.
The second person, also requesting anonymity, said Tata Motors and Volvo Eicher were also likely to start testing soon.
The development comes in the backdrop of shortage of rare earth magnets, used in EVs, which in September prompted the government to allow truckmakers to import and use motors that already had these magnets, without them losing out on incentives under the PM E-Drive scheme.
Lauding the government's efforts, a Volvo Eicher spokesperson said the move would help decarbonize Indian logistics. "VECV has been working with partners, suppliers and relevant authorities to strengthen domestic sourcing for EV components. We look forward to continuing this collaboration, thereby contributing to the development of sustainable and ‘atmanirbhar’ solutions," the spokesperson said.
Queries emailed on 14 November to the ministry of heavy industries, which operates the PM E-Drive scheme, Tata Motors and IPLTech remained unanswered.
The government had on 30 September notified a temporary relaxation to the localization requirement for e-trucks and e-buses under the PM E-Drive scheme and allowed manufacturers to use imported rare earth magnet motors because there was no alternative to traction motors, where rare earth magnets are used, for large commercial vehicles, said the first person cited above.
“Electric two-wheeler and three-wheeler manufacturers found alternatives. Some found light rare earth magnets, and some started using rare earth-free motors in their vehicles. But there was no such solution found for e-buses and e-trucks, and hence the temporary exemption," the person said.
This comes as 309 goods carriers in the N2 and N3 category of trucks have been sold o far this calendar year, far better than the 166 such units sold in the entire 2024, and the 320 units sold in 2023, according to the central government’s Vahan registry of vehicles. These trucks are predominantly used in key infrastructure sectors such as logistics, steel, ports and cement. Vahan data includes numbers from all states except Telangana.
Charging infrastructure for e-trucks remains a crucial hurdle for the green reform. “Nearly all regions reported inadequate charging infrastructure at major truck hotspots critical for MHDT (medium and heavy-duty trucks) operations," said an October report on zero-emission trucking, jointly written by the apex government think tank NITI Aayog and Smart Freight Centre, a global think tank.
Another key hurdle flagged by fleet owners was the high upfront cost of electric trucks and lack of affordable financing mechanisms, the report said.
The PM E-Drive scheme provides a subsidy in the range of ₹2-9 lakh on the upfront cost of an e-truck, which is about 2.5 times that of a diesel truck. Heavy e-trucks can cost about ₹1.0-1.5 crore, while their diesel counterparts cost about ₹25-50 lakh.
India’s adoption of e-trucks also hinges on the use-case for long-haul trucking in the country’s diverse topography, said Gurudas Nulkar, professor and director at the Centre for Sustainable Development, Gokhale Institute of Politics and Economics.
“Considering India's topography, e-trucks for inter-city long distance transport will pose considerable challenges. Large battery sizes and long charging times could make adoption slow, and infrastructure unviable," he said. E-trucks may be better suited for intra-city transport; for instance, in collecting garbage, he said.
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