India's ₹10,900 Crore E-Drive Scheme Progresses: IPLTech Electric Nears Approvals, Tata Motors, VECV to Test E-Trucks

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Updated on 16 Nov 2025, 12:13 pm

India's ambitious ₹10,900 crore PM E-Drive scheme, designed to accelerate the adoption of electric vehicles, is finally seeing significant progress, particularly in the commercial vehicle segment. IPLTech Electric Pvt Ltd, the electric-truck arm of the Murugappa Group, is on the verge of securing essential localization and homologation approvals from Indian testing agencies. This development marks a critical step towards disbursals under the scheme.

Adding further momentum, automotive giants Tata Motors Ltd and Volvo Eicher Commercial Vehicles (VECV) are slated to commence testing of their electric trucks soon. These actions signal a forthcoming phase of vehicle deployment and subsidy disbursement under the government's flagship EV incentive program.

The PM E-Drive scheme, originally set to conclude in March 2026, has been extended by two years for specific segments like e-buses and e-trucks, as well as electric and hybrid ambulances. This extension was necessitated by a slow pace of disbursals and zero disbursements in these critical areas. Truck manufacturers have previously faced hurdles in achieving the necessary scale and meeting the stringent localization standards, which require the use of India-made components.

The scheme has earmarked ₹500 crore to subsidize the purchase of over 5,600 medium and heavy-duty electric trucks (gross vehicle weight over 3.5 tonnes, including N2 and N3 categories) by fiscal year 2028. E-trucks are deemed a "sunrise sector" due to their significant contribution to vehicular carbon emissions – about a third of the country's total, despite comprising only about 3% of all vehicles.

Recent developments include a temporary relaxation by the government on localization rules for imported rare earth magnet motors. This measure was introduced in September because heavy commercial vehicles lack alternatives for traction motors that rely on these magnets, unlike electric two-wheelers and three-wheelers which found rare earth-free or lighter magnet options.

A Volvo Eicher spokesperson commented that this move is crucial for decarbonizing Indian logistics and reiterated their commitment to strengthening domestic sourcing for EV components.

Despite these advancements, significant challenges persist. Sales of N2 and N3 category trucks have shown improvement this calendar year compared to previous years, predominantly serving sectors like logistics, steel, ports, and cement. However, charging infrastructure at truck hotspots remains inadequate. Furthermore, fleet owners cite high upfront costs and a lack of affordable financing as major deterrents. The upfront cost of an e-truck can be ₹1.0-1.5 crore, significantly higher than diesel trucks priced at ₹25-50 lakh, even after the subsidy of ₹2-9 lakh provided by the scheme.

Experts also note that India's diverse topography presents challenges for long-haul e-trucking, with concerns over large battery sizes and long charging times potentially hindering widespread adoption for inter-city transport. E-trucks are considered more viable for intra-city operations, such as waste management.

**Impact**: This news has a significant positive impact on the Indian automotive and logistics sectors, driving the adoption of cleaner transportation technologies and potentially reducing operational costs for businesses in the long run. It also signals stronger government commitment to EV incentives, benefiting manufacturers and component suppliers. The progress towards localization and testing is a crucial step for the successful implementation of the PM E-Drive scheme. Rating: 8/10

**Difficult Terms**: * **Localization**: Refers to the requirement for manufacturers to use a certain percentage of domestically produced components in their vehicles. * **Homologation**: The mandatory process of testing and certifying a vehicle to ensure it meets all safety, environmental, and regulatory standards for sale in a specific country. * **PM E-Drive Scheme**: The government's flagship incentive scheme aimed at promoting the adoption of electric vehicles by reducing their purchase cost. * **Gross Vehicle Weight (GVW)**: The maximum operating weight of a vehicle as specified by the manufacturer, including the chassis, body, engine, fuel, accessories, driver, passengers, and cargo. * **N2 and N3 category trucks**: Classifications for medium and heavy-duty trucks based on their Gross Vehicle Weight. N2 vehicles typically range from 3.5 to 12 tonnes GVW, while N3 vehicles are above 12 tonnes GVW. * **Rare Earth Magnets**: Strong permanent magnets made from alloys of rare earth elements. They are crucial components in electric motors, including those used in EVs. * **Traction Motors**: Electric motors that convert electrical energy into mechanical energy to drive a vehicle. * **Vahan Registry**: A central government database that tracks vehicle registration and ownership across India. * **NITI Aayog**: The National Institution for Transforming India, a government think tank that provides policy recommendations. * **Smart Freight Centre**: A global think tank focused on promoting sustainable freight transport. * **Gokhale Institute of Politics and Economics**: A prominent academic and research institution in India.