Modi government gives a lifeline to electric bus, truck makers
What's the story
In a major relief for manufacturers of electric trucks and buses, the Indian government has extended the localization requirements under the PM e-DRIVE scheme by six months. The extension allows companies to import traction motors using rare earth magnets until September 1. The move comes amid global supply chain disruptions due to rising geopolitical tensions and China's recent restrictions on heavy rare earth magnet exports earlier this fiscal year.
Component significance
Traction motors and rare earth magnets
Traction motors are the main powertrain element in electric vehicles. They convert electrical energy from the battery into mechanical energy for the wheels. In India, EV manufacturers are the biggest consumers of these powerful rare earth magnets used in traction motors. However, securing a steady supply has been a challenge, forcing many automakers to import sub-assemblies or motors from China to keep production going.
Scheme details
A look at the PM e-DRIVE scheme
The ₹10,900 crore PM e-DRIVE scheme offers incentives for electric two-wheelers, three-wheelers, trucks, and buses to promote EV adoption. The subsidies are linked to compliance with Phased Manufacturing Programme (PMP), which mandates gradual jump in domestic value addition across vehicle components. Under this scheme, e-trucks with gross vehicle weight of over 3.5 tons but not more than 55 tons are eligible for incentives at ₹5,000/kWh of battery capacity or up to 10% of the vehicle's ex-factory price, whichever is lower.
Bus incentives
Incentives for electric buses
The PM e-DRIVE scheme has also allocated ₹4,391 crore to incentivize the purchase of 14,028 electric buses by state transport units and other public transport agencies. Electric buses with a max ex-factory price of ₹2 crore are eligible for a subsidy of ₹10,000 per kWh. The maximum subsidy limit has been set at ₹35 lakh for electric buses with 10-12 meters length, and at ₹25 lakh and ₹20 lakh respectively for those with 8-10 meters and 6-8 meters lengths.