Big Budget Shift for E-Trucks & Buses: India's EV Incentive Push Delayed? What It Means for Automakers!

Author

Akshat Lakshkar | Whalesbook News Team

Detailed Coverage:

The Ministry of Heavy Industries has asked the Finance Ministry to shift the budget allocation for financial incentives encouraging the purchase of e-trucks and e-buses from the current fiscal year to the next. This move comes as no incentives have been disbursed so far. The government has extended the PM E-Drive scheme, which was set to run from FY24 to FY26 with an outlay of ₹4,891 crore, by two years until FY28. The extension is due to manufacturers awaiting approval of component localization norms and delays in the e-bus tender process. Original equipment manufacturers (OEMs) face challenges in meeting localization criteria and navigating supply chain issues. Electric buses and heavy trucks are significantly more expensive than their diesel counterparts, costing two to three times more, making government incentives crucial for adoption. Currently, no e-truck or e-bus model has received government approval for incentives.

Impact This news indicates a short-term delay in the financial support for electric commercial vehicles, which could slow their immediate market penetration. Manufacturers may experience prolonged financial pressure without timely subsidies. However, the extension of the scheme to FY28 provides long-term clarity and commitment from the government, ensuring eventual support for the sector. Investors in the electric vehicle space, especially those focused on commercial transport, should be aware of this timeline shift. Rating: 6/10

Definitions * **Localization norms:** These are government regulations requiring manufacturers to produce a certain percentage of a product's components domestically rather than importing them. This aims to boost local manufacturing. * **OEMs (Original Equipment Manufacturers):** Companies that produce finished products, such as vehicles, using parts and components. * **Gross Vehicle Weight (GVW):** The maximum operating weight of a vehicle as specified by the manufacturer, including the vehicle's chassis, body, engine, fluids, fuel, accessories, driver, passengers, and cargo. It's used to classify heavy-duty vehicles.