PM E-DRIVE Scheme: Government Rolls Out Subsidy Plan for Electric Trucks

Key Highlights:

• ₹500 crore to support 5,643 electric trucks in FY2026 under PM E-DRIVE.
• Subsidy up to ₹9.6 lakh based on truck category, battery size, and GVW range.
• Only electric trucks bought after scrapping an old vehicle with a valid Certificate of Deposit will get incentives.
• Trucks must have a minimum 5-year warranty to qualify.
• Subsidies for two- and three-wheelers were reduced in April 2025 and may end after March 2026.

In a big step toward clean and sustainable freight mobility, the Indian government has officially released the subsidy and eligibility guidelines for electric trucks under the PM E-DRIVE Scheme. This scheme is a part of India’s larger EV mission and follows the earlier FAME initiatives. The aim is to push electric truck adoption by making them more affordable through demand incentives.

Budget for Electric Trucks in FY2026

From the total budget of ₹10,900 crore under the PM E-DRIVE scheme, ₹500 crore has been specially assigned to help 5,643 electric trucks hit the roads in FY2026. This will help logistics operators and commercial fleet owners to shift to cleaner alternatives, especially in the mid to heavy truck categories.

Who Can Get the Subsidy?

Electric trucks weighing more than 3.5 tonnes and up to 55 tonnes can get subsidies. The amount is decided as ₹5,000 per kWh of battery size or 10% of the truck’s ex-factory price, whichever is less. However, subsidies can only be availed if the buyer submits a Certificate of Deposit (CD), which is given after scrapping an old vehicle under the scrappage policy. This links the PM E-DRIVE scheme closely with the government’s Vehicle Scrappage Policy.

Category-Wise Subsidy Limits for Electric Trucks

N1 Category (3.5 to 12 tonnes GVW):

• 3.5 to 7.5 tonnes – Up to ₹2.7 lakh
• 7.5 to 12 tonnes – Up to ₹3.6 lakh

N2 Category (12 to 55 tonnes GVW):

• 12 to 18.5 tonnes – Up to ₹7.8 lakh
• 18.5 to 35 tonnes – Up to ₹9.6 lakh
• 35 to 55 tonnes – Up to ₹9.3 lakh

Minimum Warranty Terms for Eligibility

To ensure long-term value and durability, trucks must meet the following minimum warranty conditions:

• Battery: 5 years or 5,00,000 km
• Electric Motor and Vehicle Body: 5 years or 2,50,000 km

Only trucks meeting these standards will be eligible for the subsidy.

About the PM E-DRIVE Scheme

The PM E-DRIVE Scheme came into effect on October 1, 2024, and will remain valid till March 31, 2026, unless extended. It replaces both the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) schemes and the short-term Electric Mobility Promotion Scheme (EMPS).

While electric two-wheelers, three-wheelers, and buses were included in the first phase, guidelines for electric trucks, ambulances, and charging infrastructure were pending until now. The Ministry of Power is still working on the final charging infrastructure guidelines.

Total Budget Distribution and Targets

Out of the ₹10,900 crore budget:

• A total of ₹3,679 crore has been reserved to give demand-based incentives for electric two-wheelers, three-wheelers, ambulances, and trucks.
• ₹7,171 crore is for electric bus adoption, public charging infrastructure, and testing facilities.

Overall Targets:

• 24.79 lakh electric two-wheelers
• 3.16 lakh three-wheelers
• 14,028 electric buses and trucks
• 88,500 EV charging points

Subsidies for Two-Wheelers and Three-Wheelers Being Reduced

In the first year, the government offered:

• Two-wheelers: ₹5,000 per kWh (capped at ₹10,000 per vehicle)
• Electric rickshaws: ₹5,000 per kWh (capped at ₹25,000 per vehicle)
• Passenger and cargo e-autos: ₹5,000 per kWh (capped at ₹50,000 per vehicle)

From April 2025, these incentives were cut in half. Officials say the two-wheeler and three-wheeler markets have matured, and subsidies for them will likely be discontinued after March 2026. Only vehicle categories with less than 10% EV penetration may continue receiving support.

Importance of the Certificate of Deposit (CD)

A Certificate of Deposit (CD) is essential for claiming truck subsidies. It is issued when a user scrapes an old vehicle through an authorised scrapping center under the Vehicle Scrapping Policy, launched in 2022. This CD can be used to claim:

• Registration fee waivers
• Road tax benefits
• OEM discounts (up to 3% from many brands)

This effort not only promotes EV adoption but also ensures that old polluting vehicles are taken off the road.

Also Read: India Floats Biggest Tender Yet for 10,900 E-Buses Under PM e-Drive Scheme

CMV360 Says

With the PM E-DRIVE scheme, the government is taking a strong stand to electrify India’s freight movement and public transport. The scheme supports electric trucks and links the subsidy to scrapping old vehicles, helping both clean transport and a cleaner environment. However, the gradual withdrawal of subsidies for two-wheelers and three-wheelers shows that India is moving towards a self-sustaining EV market, especially in the lighter vehicle segments. This transition is expected to improve air quality, reduce logistics costs in the long run, and set the stage for a cleaner transport ecosystem in India.