Govt extends localisation deadline for EV bus, truck motors under PM E-Drive scheme

New Delhi: In a reprieve for electric truck and bus makers, the government has extended by six months localisation requirements for claiming incentives under the PM e-drive scheme, permitting companies to import traction motors that use rare earth magnets till September 1.

As per a notification issued by the Ministry of Heavy Industries on March 13, electric bus and truck companies will be required to manufacture locally “traction motor which at least includes magnet fitment, fitment of rotor assembly into motor, fitment of stator assembly into motor, shaft fitment, bearing fitment, enclosure fitment, connectors fitment, cables fitment” with effect from September 1. The notification also pertains to traction motors integrated with transmissions, where applicable, and traction motors with inverter for e-trucks.

The Centre had earlier set a March 1 deadline for electric bus makers to produce traction motors locally, and March 3 for electric truck makers.

The extension comes at a time when global supply chains are under strain due to mounting geopolitical challenges. It also comes despite China restricting exports of heavy rare earth magnets earlier this fiscal year.

Rare earth magnets are key to making traction motors-the primary powertrain component in electric vehicles-which convert electrical energy from the battery into mechanical energy for the wheels. In India, EV makers are the largest consumers of these powerful magnets. Automakers have been struggling to secure supply of magnets, with many resorting to importing sub-assemblies or motors from China to ensure continued production.

The ₹10,900-crore PM E-Drive scheme provides incentives for electric two-wheelers, three-wheelers, trucks, and buses to accelerate local EV adoption. These subsidies are linked to compliance with the Phased Manufacturing Programme (PMP), which mandates a gradual increase in domestic value addition across vehicle components.

PM E-Drive offers substantial subsidies for electric trucks and buses to boost adoption, with an allocation of ₹500 crore for electric trucks. Incentives are given for electric trucks with gross vehicle weight (GVW) exceeding 3.5 tonnes but not more than 55 tonnes at ₹5,000 per kilowatt-hour (kWh) of battery capacity, or up to 10% of the vehicle’s ex-factory price, whichever is lower. Subsidies can be availed only if the consumer buys an electric truck with a Certificate of Deposit (CD) obtained after scrapping an old vehicle.

Electric buses have the highest allocation in the scheme of ₹4,391 crore to incentivise purchases of 14,028 such vehicles by state transport units and other public transport agencies. Electric buses with a maximum ex-factory price of ₹2 crore get a subsidy of ₹10,000 per kWh. The highest limit for subsidy for electric buses with 10-12 metres has been set at ₹35 lakh, while buses with 8-10 metres and 6-8 metres have caps of ₹25 lakh and ₹20 lakh, respectively.