Siam makes a case for N1 commercial vehicles' inclusion in PM E-DRIVE

The Society of Indian Automobile Manufacturers (Siam) has urged the Ministry of Heavy Industries (MHI) to bring N1 category commercial vehicles (CVs) — those that weigh less than 3.5 tonnes — under the PM E-Drive scheme for electric trucks.

 

Their inclusion is vital for reducing carbon emissions, strengthening energy security, improving operational cost efficiency, and supporting small businesses, it said.

 

Siam, which represents all major automobile makers in India, had written a letter to the MHI on April 17, 2025, in this regard, Business Standard has learnt.

 

Siam wrote, “We are writing to request for the inclusion of N1 category vehicles under the ambit of the PM E-DRIVE scheme.”

 

It stressed that this category “constitutes 60 per cent of the CV industry volume” and plays a critical role in “urban India, including last-mile connectivity.”

 

The body pointed out that most of these vehicles travel 60-120 km daily, with some stretching up to 150-200 km, making them suitable for electrification.

 

“These vehicles are integral to urban logistics and last-mile delivery. Their high daily usage amplifies both the environmental and economic benefits of electrification,” Siam stated.

 

The letter drew attention to the fact that N1 electric vehicles had earlier been supported.

 

“These categories of vehicles have been part of the Shoonya Campaign by NITI Aayog since its inception, with an aim to deliver zero emission last-mile mobility in cities. In addition, N1 vehicles were also covered under the FAME-II scheme under the e-4w umbrella. However, as PM E-DRIVE doesn’t cover e-4w, this crucial segment doesn’t find a mention in the scheme document and operational guidelines,” it said.

 

FAME-II, launched in 2019, was the MHI’s flagship EV scheme offering incentives for buses, two-wheelers, three-wheelers and four-wheelers. It also covered N1 category CV under its e-4W umbrella.

 

This enabled small cargo carriers under 3.5 tonnes to access subsidies, vital for last-mile delivery. The scheme ended in March 2024, a few months before PM E-drive’s launch.

 

Siam, in its April letter, underlined four major factors in support of its request. First, it said, electrifying N1 category CVs would “reduce carbon emissions” given their high daily utilisation and prevalence in cities. Second, it would strengthen “energy security” by cutting dependence on fossil fuels.

 

Third, Siam highlighted “significant cost advantages” for fleet operators, noting that savings on fuel and maintenance would directly improve economics.

 

Finally, it argued that the move would benefit small operators and farmers.

 

“These savings are crucial for individuals at the bottom of the pyramid, such as farmers, small and medium enterprises (SMEs), and others,” the letter said. It added that electrification of N1 would “enable greater environmental impact per vehicle compared to personal-use vehicles.”

 

The letter was written by Siam before the MHI issued the regulations under the PM E-Drive scheme for e-trucks on July 10.

 

Siam and MHI did not respond to Business Standard’s queries regarding this letter.

   

The PM E-drive scheme for e-trucks — which has an outlay of ₹500 crore — has also faced criticism for design flaws. The scheme, intended to support 5,643 N2 (3.5–12 tonne) and N3 (above 12 tonne) e-trucks until March 2026, excludes N1 vehicles altogether.

 

Industry executives say a key hurdle is the scarcity of scrappage certificates, which are mandatory to claim incentives — as of late July, only two were available for N2 trucks and none for N3 on the government’s Digielv web portal.

 

Another barrier is the price cap of ₹1.25 crore on eligible e-trucks, which has the effect of excluding several N2 tippers and N3 long-range models.

 

Incentives are also modest, limited to ₹2.7-3.6 lakh for N2 and ₹7.8-9.3 lakh for N3, far lower than the up to ₹35 lakh subsidy available for e-buses.

 

Automakers additionally face localisation requirements for traction motors despite rare earth mineral supply constraints. Also, the approval process for certification has no fixed timeline, adding to the uncertainty.

 

Industry players had warned MHI in May that these hurdles would slow adoption. Siam’s April letter, seeking N1 inclusion, reflected the industry’s view that a crucial gap remains in the scheme’s design and that last-mile logistics, where N1 vehicles dominate.

 

A total of 466,623 N1 category vehicles were sold in India in 2024-25 (FY25), marking a 5.81 per cent year-on-year (Yo-Y) decline, according to Siam. Mahindra & Mahindra, Tata Motors, and Ashok Leyland were the top three players in the segment during FY25.

 

Senior government officials said some provisions of the PM E-Drive scheme for e-trucks could be “reworked” in the coming months to make it more “inclusive” and address concerns raised by the CV industry. They, however, did not specify which regulations may be revised.