India’s Big Push for Green Freight: A Closer Look at the PM E-DRIVE Incentive Scheme for Electric Trucks

In a decisive move to decarbonise India’s heavy road transport sector, the Ministry of Heavy Industries has rolled out detailed guidelines for incentivising electric trucks (e-trucks) under the PM Electric Drive Revolution in Innovative Vehicle Enhancement — better known as PM E-DRIVE.

 

Announced through notification S.O. 3081(E) on July 10th, 2025, this step expands the broader PM E-DRIVE scheme (initially notified in 2024) to specifically target medium and heavy-duty freight vehicles — a segment long seen as the hardest nut to crack in India’s e-mobility transition.

 

While India has made rapid strides in electric two-wheelers, cars, and buses, the freight segment — dominated by diesel trucks — remains a major contributor to vehicular emissions, air pollution, and oil imports. According to various studies, trucks make up less than 5% of India’s vehicle fleet but account for nearly 60% of diesel consumption in the transport sector.

 

Tackling this segment is vital if India is to meet its ambitious net-zero target by 2070.

 

The new notification clarifies that incentives will be available for N2 and N3 category e-trucks under the Central Motor Vehicle Rules:

• N2: Gross Vehicle Weight (GVW) of 3.5–12 tonnes

• N3: GVW of 12–55 tonnes

 

For articulated vehicles like tractor-trailers, only the “puller tractor” part qualifies — reflecting the practical reality that trailers are passive.

 

The demand incentive is structured around two principles:

1. Battery Capacity: ₹5,000 per kilowatt-hour (kWh)

2. Ex-Factory Price: 10% of the vehicle’s ex-factory price (excluding trailer)

 

The lower of these two will apply, with additional caps based on the vehicle’s weight. For example:

• 3.5–7.5 tonnes: max ₹2.7 lakh

• 7.5–12 tonnes: max ₹3.6 lakh

• 12–18.5 tonnes: max ₹7.8 lakh

• 18.5–35 tonnes: max ₹9.6 lakh

• 35–55 tonnes: max ₹9.3 lakh

 

Interestingly, the maximum incentive drops slightly for the heaviest category — a quirk that some industry watchers will likely question.

 

On the face of it, one might expect the incentive to rise consistently with vehicle weight and battery size. However, the drop from ₹9.6 lakh for 18.5–35 tonnes to ₹9.3 lakh for 35–55 tonnes suggests the government wants to push fleet operators to adopt electrification in the sweet spot of medium-to-heavy haulage first, where TCO (total cost of ownership) parity can be achieved faster.

 

It may also reflect concerns about misuse or limited feasibility for battery trucks in ultra-heavy categories — which still face technological and charging infra hurdles.

 

A crucial detail is that incentives hinge on scrappage: fleet operators must produce a valid Certificate of Deposit from a registered scrapping facility for an equivalent ICE truck. This ensures that old, polluting trucks are actually taken off the road rather than just resold down the value chain.

 

While the announcement has been welcomed by sustainability advocates and some fleet owners, its real-world impact depends on multiple factors:

• Battery costs: Even with these incentives, upfront costs for e-trucks remain significantly higher than for diesel alternatives.

• Charging infrastructure: Long-haul trucking needs robust fast-charging corridors — a work in progress in India.

• Total fleet economics: Operators will weigh downtime, payload penalties (due to heavy batteries), and residual value.

 

Despite the caveats, the E-DRIVE incentive is a clear signal that India’s green freight transition is no longer just about pilot projects or buses. It is a nudge for fleet operators, OEMs, and financiers to start scaling viable electric truck models in the 3.5–35 tonne segment — arguably the sweet spot for intra-city and regional haulage.

 

Combined with the broader push for scrappage policy, battery manufacturing, and dedicated green transport corridors, this could help India close a stubborn gap in its EV adoption story.

 

For the first time, the government has put real numbers and structure behind its intent to clean up India’s diesel truck fleet. Whether the push is enough to make e-trucks mainstream — or just another well-meaning but underutilised scheme — will depend on how quickly the supporting ecosystem grows.

 

Either way, the E-DRIVE notification is an unmistakable sign: the road freight revolution has begun, and diesel’s days are numbered.