JBM Auto, Olectra shares extend gains as Centre unveils ₹9,585 crore vehicle replacement scheme

Shares of electric mobility companies JBM Auto Ltd. and Olectra Greentech

Ltd. gained as much as 6% on Thursday, June 4, after the Union Cabinet approved a major vehicle replacement programme aimed at accelerating the adoption of cleaner transport in the Delhi-NCR region.

The government has cleared a ₹9,585 crore initiative to phase out older commercial vehicles and encourage the transition to cleaner alternatives. The scheme is expected to cover around 2.07 lakh vehicles, including nearly 1.91 lakh trucks and more than 16,000 buses operating in the National Capital Region.

Under the programme, owners of BS-IV and older vehicles will be eligible for incentives if they replace their vehicles with BS-VI-compliant or electric models.

The policy places a strong emphasis on electrification, with Delhi requiring all light goods vehicles purchased under the scheme to be electric. Buses procured under the programme in the capital will be restricted to either electric or BS-VI CNG variants.

To support adoption, the Centre will offer a 5% interest subsidy on vehicle loans for five years, while beneficiaries will also receive monthly fuel vouchers worth up to ₹4,800.

In addition, participating states will be allowed to provide road tax exemptions of up to 100% for replacement vehicles, and vehicle manufacturers will offer discounts of 8% on ex-showroom prices. The incentives will remain available for five years from the registration date of the new vehicle.

The government expects the scheme to significantly reduce vehicular emissions and improve air quality across the NCR region.

The policy is seen as a major positive for electric bus manufacturers, particularly JBM Auto and Olectra Greentech, which are among the leading players in India's electric public transport market.

JBM Auto held a 49% share of the electric bus registration market in May 2026 and recorded 157 registrations during the month, the highest among industry participants.

Olectra Greentech's management said the replacement programme is likely to create a substantial demand boost for electric buses, with a significant share of vehicle replacements expected to shift directly to EVs.

The company said that around 17,000-18,000 electric buses are currently operational in the country and said the industry has sufficient capacity to meet higher demand. Olectra currently has an annual production capacity of 5,000 electric buses and an order book of about 10,000 vehicles scheduled for delivery over the next 24 months.

The company added that it can double its manufacturing capacity to 10,000 units within six months if demand accelerates, while its average receivables cycle remains in the range of three to six months.