Incentives are applicable for electric trucks with gross vehicle weight exceeding 3.5 tonnes but not more than 55 tonnes, and will be calculated as ₹5,000 per kilowatt-hour (kWh) of battery capacity.
11 Jul 2025 | 5060 Views | By Kiran Murali & Yukta Mudgal
The Union government has announced the guidelines and subsidies for electric trucks under the PM E-DRIVE Scheme, which offers demand incentives for electric vehicles and supports charging infrastructure. A total of Rs 500 crore has been allocated under the Rs 10,900-crore scheme to support 5,643 electric trucks in the financial ...
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The Union government has announced the guidelines and subsidies for electric trucks under the PM E-DRIVE Scheme, which offers demand incentives for electric vehicles and supports charging infrastructure. A total of Rs 500 crore has been allocated under the Rs 10,900-crore scheme to support 5,643 electric trucks in the financial year 2026.
As per the guidelines, incentives are applicable for electric trucks with gross vehicle weight exceeding 3.5 tonnes but not more than 55 tonnes. The incentive will be calculated as ₹5,000 per kilowatt-hour (kWh) of battery capacity, or up to 10% of the vehicle’s ex-factory price, whichever is lower.
Electric trucks under the N2 category with a Gross Vehicle Weight (GVW) between 3.5 and 7.5 tonnes qualify for a maximum incentive of Rs 2.7 lakh. Trucks with a GVW exceeding 7.5 tonnes and up to 12 tonnes are eligible for a maximum subsidy of Rs 3.6 lakh. Subsidies can be availed only if the consumer buys an electric truck with a Certificate of Deposit (CD) obtained after scrapping an old vehicle.
"The incentive will be applicable only for the “puller tractor” of N3 category in case of an articulated vehicle (tractor-trailer combination)," the government said.
In the N3 category, trucks with a GVM of more than 12 tonnes and up to 18.5 tonnes will be eligible for a maximum subsidy of ₹7.8 lakh. Those with a GVM of over 18.5 tonnes and up to 35 tonnes can receive up to ₹9.6 lakh, while trucks with a GVM between 35 and 55 tonnes will be eligible for a subsidy of up to ₹9.3 lakh.
The eligibility for incentives is also based on a minimum battery warranty of 5 years or 5,00,000 km, a motor warranty of 5 years or 2,50,000 km, and a vehicle warranty of 5 years or 2,50,000 km.
“The incentives of e-trucks announced today under the PM E-Drive scheme are a step forward in the journey towards zero-emission mobility. Sustained progressive direction in this direction will be key in this direction will be key to improving total cost of ownership and driving large-scale fleet adoption,” said Girish Wagh, executive director at Tata Motors.
The PM E-Drive scheme replaced the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME) schemes and the temporary Electric Mobility Promotion Scheme (EMPS). It began on October 1, 2024, and is set to expire on March 31, 2026, unless extended.
While the incentives for two-wheelers, three-wheelers, and buses were rolled out last year, electric trucks, e-ambulances, and incentives for charging infrastructure have been awaiting guidelines. The guidelines for charging infrastructure is being formulated by the Ministry of Power.
Under the scheme, demand incentives worth Rs 3,679 crore have been allocated for electric two-wheelers, three-wheelers, ambulances and trucks, while Rs 7,171 crore has been set aside to boost the adoption of electric buses, improve public charging infrastructure and upgrade testing infrastructure.
The target is to support 24.79 lakh electric two-wheelers, 3.16 lakh three-wheelers and 14,028 buses and trucks, as well as 88,500 electric vehicle charging sites.
The subsidies given on the purchase of electric vehicles are instrumental in driving the early-stage adoption of electric vehicles as incentives help in reducing the upfront cost of the vehicle.
As EV adoption grows, the government has been progressively scaling back subsidies, signaling a deliberate policy shift away from fiscal dependency. The incentives for purchasing electric two-wheelers and three-wheelers are likely to be phased out with the expiration of the current scheme.
Government officials are of the opinion that only those segments that have not reached 10% electric vehicle penetration will require demand incentives from 2026.
The 2-year PM E-Drive scheme with a subsidy of Rs 5,000 per kWh for electric two-wheelers in October last year and a cap of Rs 10,000 per vehicle. The incentive was halved to ₹2,500 per kWh in April this year.
Electric rickshaws were getting a subsidy of Rs 5,000 per kWh with a cap of Rs 25,000 per vehicle, while passenger and cargo electric autos received a subsidy of Rs 5,000 per kWh with a cap of Rs 50,000 per vehicle last year. These subsidies were also halved from April 2025.
Several OEMs and industry leaders have indicated that the two-wheeler and three-wheeler industry has reached a level of scale of self-sufficiency, that they can sustain the growth momentum going forward without depending on the incentives.
A Certificate of Deposit (CD) obtained after scrapping an old vehicle is mandatory to avail the incentives for electric trucks.
The Voluntary Vehicle-Fleet Modernisation Programme, or Vehicle Scrapping Policy, was introduced in 2022 to support vehicle scrapping through incentives and infrastructure in the form of automated testing stations and registered vehicle scrapping facilities.
On depositing the vehicle for scrapping at registered scrapping facilities, the vehicle owner gets the CD. It is being used for multiple benefits, such as registration fee waivers, road tax concessions, and discounts from automakers on the purchase of new vehicles.
The government has been pitching the vehicle scrappage policy, highlighting its impact on reducing vehicle pollution, improving safety, and boosting new vehicle sales. Recently, most OEMs have agreed to give discounts up to 3% to consumers who purchase new vehicles after scrapping their old vehicles.
"What makes this scheme particularly impactful is its linkage to the scrappage of older vehicles, delivering both environmental and economic benefits," said Volvo Eicher Commercial Vehicles Managing Director and CEO Vinod Aggarwal.