Auto companies to get relief under PM E-drive scheme; incentives on import of assembled motors

The Indian government, under its PM E-drive scheme, is likely to provide relief to automobile companies, sources familiar with the development told Zee Business.

According to them, the initiative will benefit manufacturers of electric buses and trucks as the government is likely to give relief on the import of fully assembled motors.

Incentives on the import of fully assembled motors

Under the scheme, incentives will be provided on the import of fully assembled motors. Primarily, heavy rare-earth materials are used in fully assembled motors. These materials are essential for the efficient functioning of electric motors, and the government’s incentives will likely help ease the financial burden on manufacturers.

Benefits for electric bus and truck manufacturers

The PM E-Drive scheme focuses on companies manufacturing electric buses and trucks. The government will provide benefits to these manufacturing companies for a period of six months. Companies have been struggling with technology and supply chain constraints, specifically from China. China’s new licensing policy has slowed down approvals for exporting heavy rare-earth magnets to India. The government’s relief will continue until the supply of rare earth magnets becomes normal.

Upcoming tender for electric buses

The government is preparing to issue a tender for the procurement of 10,000 electric buses. This initiative is expected to create a strong market for electric public transport solutions that align with the scheme's overall goal of boosting the EV ecosystem, reducing fossil fuel dependency, and lowering carbon emissions.

Companies that may benefit

Major auto companies are set to get relief under the PM E-drive scheme, including:

1) Tata Motors

2) Ashok Leyland

3) Olectra Greentech

4) JBM Auto

What is the PM E-drive scheme?

The PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme was launched on September 29, 2024, by the Ministry of Heavy Industries. The scheme aims to accelerate electric vehicle (EV) adoption by providing upfront consumer subsidies, establishing public charging infrastructure, promoting domestic manufacturing through a phased manufacturing program (PMP), and upgrading vehicle testing agencies. The scheme has a two-year implementation period ending in March 2026.