Electric commercial vehicle (eCV) manufacturers are in a difficult position as they have been unable to meet the localization requirements under the 'PM Electric Drive Revolution in Innovative Vehicle Enhancement' (PM eDRIVE) program, which is set to take effect on Tuesday, industry leaders told Business Standard.
The Society of Indian Automobile Manufacturers (Siam) requested a seven-month extension for localization from the Ministry of Heavy Industries (MHI) on July 22. They asked to postpone the deadline for localizing traction motor systems and motor controllers for electric buses (e-buses) and electric trucks (e-trucks) from September 1 to April 1, 2027.
The industry body attributed this request to ongoing disruptions in the supply of rare earth magnets caused by Chinese export restrictions. Government officials informed Business Standard on Monday that a decision on the industry's request has not yet been made.
Under the Production Linked Incentive (PLI) scheme within the PM eDRIVE program, e-bus and e-truck manufacturers were required to manufacture key components of traction motors in India. Initially, the government planned to introduce these norms on September 1, 2025, but the deadline was postponed twice following appeals from the industry.
The first extension, announced on September 30, 2025, moved the implementation to March. Then, on March 13, the ministry allowed manufacturers to continue importing traction motors containing rare earth magnets until August 31, effectively pushing the compliance with localization norms to September 1.
Supply Chain Issues
In its letter to MHI dated July 22, Siam stated that China's export controls on heavy rare earth elements such as dysprosium and terbium, as well as permanent magnets, have 'significantly altered global permanent magnet supply chains,' which are a critical component for traction motors used in e-buses and e-trucks.
The industry organization noted: 'Despite export licenses being issued for certain batches, procurement remains subject to regulatory approvals, increased order fulfillment times, and supply uncertainty.' Siam also reported that geopolitical tensions, including instability in West Asia, have exacerbated supply chain problems by increasing transit time, freight costs, and uncertainty regarding the availability of critical components.
The organization emphasized: 'Consequently, original equipment manufacturers continue to face significant difficulties in ensuring a predictable supply of permanent magnets while complying with the PLI localization requirements as originally intended.'
According to Siam, the extension would help prevent production disruptions if supply restrictions persist and would give manufacturers and component suppliers more time to establish local supply chains and expand production capacity. The additional time would also allow for a smooth transition from imported to partially localized, and ultimately fully localized, traction motor and motor controller systems.
Neither the Ministry nor Siam responded to Business Standard's requests on this matter.


