Govt announces incentive for e-trucks under PM E-Drive scheme. Delhi gets special allocation.

Mint

11-07-2025

New Delhi: With less than nine months to go in the PM E-Drive scheme's runtime, Union heavy industries minister H.D. Kumaraswamy on Friday announced guidelines for consumers to avail incentives for purchasing electric trucks.
Customers can get incentives of ₹ 5,000 for every kilowatt-hour of an e-truck's battery capacity, Kumaraswamy said during a press briefing in New Delhi. Typically, the battery of an electric truck has a capacity of 250-400 kWh.
Mint first reported on 3 July that the government was considering a ₹ 5,000 per kWh subsidy for electric trucks under the PM E-Drive scheme.
The maximum incentive available will be capped at ₹ 9.6 lakh for a single e-truck, the Kumaraswamy said.
The government plans to incentivise about 5,600 e-trucks, with an allocation of about ₹ 500 crore under the ₹ 10,900 crore PM E-Drive scheme. Of this, 1,100 e-trucks will be reserved for Delhi owing to the national capital's air quality woes.
The government's flagship incentive programme to promote electric mobility, which received the Union cabinet's assent in September, is slated to end in March 2026.
Electric trucks are among sunrise sectors identified in the scheme, which came as a successor to two iterations of the FAME scheme from FY15 to FY24. FAME stands for Faster Adoption and Manufacturing of Electric (& Hybrid) vehicles.
Under the PM E-Drive scheme, incentives will be given to N2 and N3 categories of trucks, weighing 3.5-12 tonnes and 12-55 tonnes, respectively.
'Several leading OEMs (original equipment manufacturers) such as Volvo Eicher, Tata Motors, and Ashok Leyland are already engaged in manufacturing electric trucks in India, enhancing indigenous capabilities under the Atmanirbhar Bharat vision,' the ministry of heavy industries said in a statement on Friday.
'As a strong show of CPSE (Central public sector enterprises) leadership, the Steel Authority of India Limited (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% of all vehicles hired across its units are electric,' it added.
Electric trucks are likely to be used in sectors such as cement, ports, steel, and logistics, a senior government official said during the press briefing.
Manufacturers of e-trucks are mandated to provide warranties to buyers for electric vehicle batteries as well as the vehicle and the motor, the official said.
The battery must be covered under a warranty for five years or 500,000 kilometres, whichever is earlier. The vehicle and motor must have a warranty of five years or 250,000 kilometres, whichever is earlier, as per the ministry's statement.
A key condition to avail incentives for buying electric trucks under the scheme is a mandatory scrapping certificate issued by the ministry of road transport and highways (MoRTH).
'These certificates are tradeable. Anyone in Chennai, for instance, can scrap their ICE truck, and someone in, say, Delhi, can buy that scrapping certificate and avail the incentives,' the government official said.
ICE refers to conventional internal combustion engines of vehicles that run on fossil fuels.
Manufacturers also have to follow a phased manufacturing programme (PMP) for the zero-emission e-trucks. The PMP requires manufacturers to source certain parts locally, while listing components they are allowed to import.
Policy experts said the incentives for electric trucks under the PM E-Drive scheme can be the first step towards decarbonising critical sectors such as logistics, which use diesel-guzzling trucks.
'The ₹ 5,000 per kWh incentive is a good move and should help more people seriously consider electric trucks, especially those running large fleets where fuel savings really add up,' said Nikhil Dhaka, vice president–public policy, Primus Partners, a management consultancy.
'As for Delhi, getting 1,100 electric trucks on the roads can make a real difference. Trucks are a big source of pollution, and this shift will help improve the city's air quality over time, especially if more such steps follow,' Dhaka added.
But electric vehicle financiers said the scrapping certificate mandate could make some small fleet owners and owner-drivers think twice about switching to e-trucks.
'Many older diesel trucks, particularly in NCR (national capital region), are still operational despite being past their prime. Owners hesitate to part with them due to uncertain resale value and operational familiarity,' said Dhiraj Agrawal, chief business officer, Mufin Green Finance.
A digitized and decentralised scrapping mechanism and fair and predictable scrapping value is required to encourage low- and mid-income operators to make the switch to electric vehicles, said Agrawal.