SIAM seeks fresh extension for EV bus, truck localisation under PM E-DRIVE

The industry body has sought to defer localisation norms till April 1, 2027, saying China's export curbs on rare-earth magnets continue to disrupt supplies.

The Society of Indian Automobile Manufacturers (Siam) has sought a fresh seven-month extension from the Ministry of Heavy Industries (MHI) for implementing localisation norms for electric buses (ebuses) and electric trucks (etrucks) under the PM E-DRIVE scheme, citing continued disruption in the supply of rare-earth magnets due to China's export restrictions.

 

In a letter to the MHI on July 22, the industry body has requested that the deadline for localising traction motor and motor controller systems be deferred from September 1, 2026, to April 1, 2027.

 

Under the PM E-DRIVE scheme's Phased Manufacturing Programme (PMP), makers of electric buses and trucks are required to manufacture key components of traction motors in India. The Centre had originally planned to enforce these norms from September 1, 2025, but has already deferred the deadline twice following industry requests.

   

The first extension, announced on September 30, 2025, postponed the implementation to March 2026. Subsequently, on March 13, 2026, the ministry allowed manufacturers to continue importing traction motors containing rare-earth magnets until August 31, 2026, pushing compliance with the localisation norms to September 1, 2026.

 

Explaining the latest request, Siam said China's export control measures on heavy rare-earth elements (such as Dysprosium and Terbium) and permanent magnets have "significantly altered global supply chains for permanent magnets", which are a critical input for traction motors used in electric buses and trucks.

 

"Although export licences have been granted for certain shipments, procurement remains subject to regulatory approvals, extended lead times, and supply uncertainty," the industry body said.

 

Siam also pointed to geopolitical tensions, saying that instability in West Asia has worsened supply-chain challenges by increasing transit time, freight costs, and uncertainty over the availability of critical components.

 

"Consequently, original equipment manufacturers (OEMs) continue to face significant challenges in securing a predictable supply of permanent magnets while simultaneously complying with the PMP localisation requirements as originally envisaged," it said.

 

According to Siam, extending the deadline would help avoid production disruptions if supply constraints persist, while giving vehicle manufacturers and component suppliers more time to develop local supply chains and expand manufacturing capacity. It said the additional time would also enable an orderly transition from imported systems to partially localised and eventually fully localised traction motor and motor controller systems.

 

The MHI is examining the industry's representation. The ministry as well as Siam did not respond to Business Standard's queries on this matter.

 

Issues flagged

 

• Requested that deadline be deferred to April 1, 2027
• Says China’s export controls on heavy rare-earth elements and permanent magnets have ‘significantly’ altered supply chains
• Instability in West Asia has worsened supply-chain challenges by increasing transit time