Electric Trucks May Receive Up to Rs 19 Lakh Subsidy Under New Scheme

Key Highlights:

• The government is planning subsidies of up to Rs 19 lakh per electric truck under the PM E-Drive scheme.
• Rs 500 crore has been set aside, with two possible subsidy models being considered.
• The first model offers lower payouts but can support more trucks.
• Electric trucks cost nearly twice as much as diesel ones.
• Manufacturers feel the incentives are low compared to electric buses.

After focusing on electrifying passenger cars, two-wheelers, three-wheelers, and public buses, the government is now looking at electric trucks. As part of the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-Drive) scheme, launched in October 2024, the government plans to introduce a subsidy program for electric trucks, offering incentives of up to Rs 19 lakh per vehicle. This represents a significant step toward reducing pollution in freight transport. It could also benefit companies such as Tata Motors, Ashok Leyland, IPLTech Electric, and Propel Industries, as the demand for battery-powered trucks is expected to increase with this support.

Rs 500 Crore Budget and Two Subsidy Models

The government has set aside Rs 500 crore under the PM E-Drive scheme just for electric trucks. While the final plan is still being decided, officials are looking at two ways to give subsidies. One option gives Rs 5,000 per kilowatt-hour (kWh) of battery capacity, with a limit of 10% of the truck’s factory price—up to Rs 12.5 lakh for a 55-tonne truck. The other option offers Rs 7,500 per kWh, with a higher limit of 15% of the vehicle cost, which could mean a subsidy of up to Rs 18.7 lakh.

Sources say the government is likely to choose the first subsidy model. Even though it gives a smaller amount per truck, it can support more trucks, around 5,000, under the Rs 500 crore budget. In comparison, the second model would only cover about 3,500 trucks.

Targeting the Cost Gap Between Diesel and Electric Trucks

Officials said the goal is to cover 15-20% of the price difference between electric trucks and diesel ones. They believe the first plan is better because it gives moderate support to more trucks, from 3.5-tonne to 55-tonne models, and helps more buyers across the country.

High Cost of E-Trucks and Expected Subsidy Impact

Right now, electric trucks are almost twice as expensive as diesel ones. A regular 3.5–7.5 tonne diesel truck costs about Rs 17 lakh, while an electric one in the same range can go up to Rs 34 lakh. With the proposed plan, a smaller e-truck with a 4.8 kWh battery could get around Rs 3.5 lakh as a subsidy, which covers nearly 20% of the extra cost. For larger 55-tonne trucks, which can cost around Rs 1.25 crore, the subsidy could be as high as Rs 12.5 lakh, helping reduce the purchase cost quite a bit.

The Ministry of Heavy Industries is talking to key players from the steel, cement, logistics, and port sectors. These discussions aim to understand industry demand and will shape the final plan for rolling out the scheme more effectively. However, the electric truck manufacturers' proposed incentives are not enough. They pointed out that electric buses get subsidies of up to Rs 35 lakh, so trucks should also receive similar support.

But government officials say there's a clear reason for the difference. “Buses are used for public transport and serve a welfare purpose, while trucks are used for business and make profits by saving on fuel costs. So the level of support should be different,” they explained.

Also Read: Olectra Greentech Drives Into Heavy-Duty Electric Trucks With Strong Production Plans

CMV360 Says

The government’s move to support electric trucks is a positive start, but the subsidy may not be strong enough to push large-scale adoption. Since electric trucks are still very expensive, offering more financial relief could make a bigger impact. Balancing budget limits with industry needs will be key going forward.