According to ICRA’s analysis, truck electrification is expected to reach approximately 2 percent by end-FY2026, up from current minimal levels. The scheme provides demand incentives that reduce e-truck purchase costs by 8-10 percent for buyers.
PM E-Drive Scheme for e- trucks to propel faster adoption of electrification in the N2 and N3 category trucks. Truck electrification plan expected to improve to close to 2 per cent by the end of FY2026 from minuscule levels at present. The scheme aims to develop an ecosystem for promoting the manufacturing of EV components and expanding charging infrastructure in the coming years.
The Ministry of Heavy Industries notified the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-Drive) scheme for electric trucks on July 10, 2025, allocating Rs 500 crore to provide procurement assistance for over 5,600 e-trucks in FY2026. The scheme aims to accelerate electrification in India’s truck segment, where adoption has remained at minuscule levels due to high pricing barriers.
The initiative targets trucks in N2 category (3.5-12 tonne gross vehicle weight) and N3 category (12-55 tonne GVW), with incentive amounts varying based on vehicle weight. Trucks must meet specific performance criteria including minimum range, maximum electric energy consumption, minimum speed, acceleration, and gradeability requirements to qualify for incentives.
Beyond procurement incentives, the scheme allocates funding for developing EV component manufacturing ecosystems and expanding charging infrastructure to address range anxiety concerns. The program also supports creation of testing infrastructure for cargo mobility electrification.
ICRA noted that despite operational challenges including limited localization, dependence on imported rare earth metals, and charging infrastructure gaps, the scheme offers long-term benefits through cleaner goods transportation.
“While the Scheme faces operational challenges such as limited extent of localisation at present (which may increase the cost of spare parts), heavy dependence on imports of rare earth metals, charging infrastructure related shortcomings, etc., it is expected to provide several benefits such as cleaner and more efficient means for transporting goods in the longer run. Moreover, the total cost of ownership (TCO) for e-trucks (post the PM E-Drive Scheme incentives) remains a considerable 15-20% lower than their diesel counterparts, thus offering monetary benefits for the end users,” ICRA said.
The total cost of ownership for e-trucks under the scheme remains 15-20 percent lower than diesel alternatives, providing financial advantages to end users. Recent technological advances have addressed heavy-duty requirements for electric trucks, supporting the transition from conventional vehicles.
The e-truck segment has been among the slowest EV technology adopters in India, with pricing serving as a primary electrification obstacle. The PM E-Drive scheme represents a targeted approach to overcome these barriers through comprehensive demand-side and infrastructure support measures.