PM E-DRIVE E2W Subsidy Extended Till March 2028 With ₹1,000 Cr Additional Outlay

In a bid to boost EV adoption in the country, the Central has increased the total outlay of the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme to ₹11,900 Cr.

The revised notification, issued by the Ministry of Heavy Industries (MHI) yesterday, increases the scheme outlay by ₹1,000 Cr from the earlier set ₹10,900 Cr and extends support for registered electric two-wheelers (E2Ws) until March 31, 2028.

Under the revised structure, an outlay of ₹2,767 Cr has been earmarked for registered E2Ws, with an aim to support up to 45.79 Lakh electric two-wheelers.

For E2Ws, the incentive, which will be applicable for purchases between April 1, 2025 to March 31, 2028, will be ₹2,500 per kWh, capped at ₹5,000 per vehicle. This is lower than the earlier incentive of ₹5,000 per kWh, capped at ₹10,000 per vehicle.

However, it must be noted that the aforementioned reduction is not a new development. The original PM E-DRIVE notification, issued in September 2024, had already highlighted that the incentives will be halved from FY26 onwards, with the incentive capped at 15% of the vehicle’s ex-factory price.

E2Ws with an ex-factory price of up to ₹1.5 Lakh are eligible for the incentive.

The latest extension follows a March 27, 2026 notification, under which MHI had set July 31, 2026, as the terminal date for registered e2Ws, while retaining March 31, 2028, as the terminal date for the overall scheme. The March notification had capped the maximum number of E2Ws eligible for support at 24.79 Lakh, with ₹1,772 Cr earmarked for the segment.

The latest amendment increases the e2W support limit to 45.79 Lakh vehicles and raises the allocation for the segment to ₹2,767 Cr.

E-Rickshaw Incentives Continue

The March notification had also revised the support structure for registered e-rickshaws and e-carts. The maximum number of vehicles eligible for support was set at 39,034, with ₹50 Cr earmarked for the segment. The incentive was set at ₹5,000 per kWh, capped at ₹25,000 per vehicle, for FY25, and ₹2,500 per kWh, capped at ₹12,500 per vehicle, from FY26 onwards.

The maximum ex-factory price for e-rickshaws and e-carts to qualify for the incentive was set at ₹2.5 Lakh, with the incentive also subject to a cap of 15% of the vehicle’s ex-factory price. The terminal date for registered e-rickshaws and e-carts remains March 31, 2028.

The last date for submitting claims under the scheme has been set as December 31, 2027, while no payments will be made by MHI or the project management agency after March 31, 2028.

PM E-DRIVE was originally notified in September 2024 with an outlay of ₹10,900 Cr and was initially scheduled to run from October 1, 2024, to March 31, 2026. The scheme was introduced to accelerate EV adoption, establish charging infrastructure and support the development of the domestic EV manufacturing ecosystem.

It provides demand incentives for E2Ws and E3Ws, along with support for electric ambulances, e-trucks and other emerging EV categories. It also provides grants for electric buses, charging infrastructure and the upgrading of testing agencies.

In June, MHI expanded the PM E-DRIVE scheme to electric ambulances, allocating ₹500 Cr to support 3,811 units over FY27 and FY28. 

The target includes 1,797 electric ambulances in FY27 and 2,014 units in FY28. The scheme covers patient transport vehicles (Type B), basic life support (BLS) ambulances (Type C) and advanced life support (ALS) ambulances (Type D), as defined under AIS 125.

PM E-DRIVE builds on the government’s earlier electric mobility programmes, including FAME-I, FAME-II and the Electric Mobility Promotion Scheme (EMPS) 2024.

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