Govt Revises PM E-DRIVE’s Subsidy Timelines For E2Ws, E3Ws
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The Ministry of Heavy Industries (MHI) has revised the guidelines under the PM E-DRIVE (PM Electric Drive Revolution in Innovative Vehicle Enhancement) initiative, extending subsidy timelines and increasing targets for electric vehicles, particularly electric two- and three-wheelers.
According to an official notification, E2Ws registered till July 31, 2026, will be eligible for incentives, while E3Ws will continue to receive subsidies till March 31, 2028.
Earlier, incentives for these segments were set to end in March 2026.
The government has also introduced price ceilings for availing subsidies. E2Ws priced above ₹1.5 Lakh and E3Ws above ₹2.5 Lakh will not qualify under the scheme.
Subsidies will be linked to battery capacity, with E2Ws eligible for up to ₹5,000 per kWh, capped at ₹10,000 per vehicle.
This support will be reduced in the later phase to ₹2,500 per kWh, with a cap of ₹5,000. For e-rickshaws and e-carts, incentives are set at ₹5,000 per kWh, capped at ₹25,000 per vehicle. These will later be lowered to ₹2,500 per kWh, capped at ₹12,500. In all cases, the incentive will be limited to 15% of the vehicle’s ex-factory price, whichever is lower.
The government has also reduced the allocation for e-rickshaws and e-carts to ₹50 Cr, indicating slower adoption in this segment. At the same time, the L5 category of electric three-wheelers has already achieved its target and was closed on December 26, 2025.
The notification added that incentive amounts may be revised from time to time, depending on how vehicle costs change.
Besides, the centre has also scaled E2W targets to 24.8 Lakh from 14 Lakh. The goal for E3Ws has been raised to over 39,000 from the 36,400.
PM E-DRIVE was rolled out in September 2024 as a two-year scheme with a total outlay of Rs 10,900 Cr, replacing the Electric Mobility Promotion Scheme 2024 (EMPS-2024), which ran from April to September 2024.
The scheme aims to boost the adoption of electric vehicles by offering subsidies, expanding charging infrastructure, and supporting local manufacturing, building on the earlier FAME scheme. The revision comes at a time when India’s EV ecosystem is growing rapidly, with the market expected to reach $132 Bn by 2030.
Last year in August, the central government extended and revised the PM E-DRIVE scheme by two years, shifting its deadline from March 2026 to March 31, 2028. However, the subsidy deadlines were not changed at that time. The latest revision now extends those timelines as well.
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