In a major relief to electric truck and bus makers claiming incentives under the PM E-Drive scheme, the government has eased localisation requirements for manufacturers of medium-duty electric trucks and buses, allowing them to continue importing traction motors that use magnets until March next year.
Under the Rs 10,900-crore PM E-Drive scheme, the government provides incentives to electric two-wheelers, three-wheelers, trucks and buses. Subsidies are subject to compliance with PMP, which ensures domestic value addition.
The Ministry of Heavy Industries has issued a notification that amends the Phased Manufacturing Programme (PMP) guidelines for electric trucks under the N2 category (3.5–12 tonnes) and electric buses in this regard.
Earlier, for N2 category trucks and electric buses, the traction motor—“which at least includes magnet fitment, fitment of rotor assembly into the motor, fitment of stator assembly into the motor, shaft fitment, bearing fitment, enclosure fitment, connectors fitment, cables fitment” was mandated to be manufactured domestically from September 1.
The amendment provides a six-month extension for the domestic manufacturing of traction motors. Under the revised Phased Manufacturing Programme (PMP) guidelines, these motors must now be produced in India for N2 trucks starting March 1 and for electric buses starting March 3.
The relaxation in domestic value addition requirements comes as China has suspended exporting magnets, which are crucial for motors. Automakers have been struggling to secure the supply of magnets, and many resorted to importing magnet-containing complete or sub-assemblies, or motors from China to ensure their production.
The PM E-Drive scheme has an allocation of Rs 500 crore for electric trucks. Incentives are given for electric trucks with a GVW 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 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.
Electric buses got the highest allocation in the scheme, with a total of Rs 4,391 crore to incentivise 14,028 electric buses for state transport units and other public transport agencies. Electric buses with a maximum ex-factory price of Rs 2 crore get a subsidy of Rs 10,000 per kWh. The maximum limit for subsidy for electric buses with 10–12 metres has been set at Rs 35 lakh, while buses with 8-10 metres and 6–8 metres have caps of Rs 25 lakh and Rs 20 lakh, respectively.
Meanwhile, the government is looking to reduce dependence on Chinese rare earth magnet imports through subsidies for domestic magnet manufacturing.