Govt halves e2W subsidy to ₹5k, extends PM E-DRIVE scheme till March 2028
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The government has extended the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme by a year to March 31, 2028. The incentives for electric two-wheelers (e2Ws) have also been halved to ₹2,500 per kWh from ₹5,000 per kWh earlier.
The incentive will now be capped at ₹5,000 per e2W, compared with ₹10,000 per vehicle in FY25. It will be available for electric two-wheelers with an ex-factory price of up to ₹1.5 lakh.
The total outlay for the scheme remains unchanged at ₹11,900 crore, according to a notification issued by the Ministry of Heavy Industries. The scheme, which was notified in September 2024, was initially scheduled to run until March 31, 2027.
The government has earmarked funds of around ₹2,767 crore for incentives for registered e2Ws. The scheme can support a maximum of 45,79,120 registered electric two-wheelers, according to the official notification.
The incentive is also subject to a ceiling of 15 per cent of the ex-factory price of an e2W or e3W, whichever is lower. The government said the incentive per kWh may be reviewed based on reductions in vehicle costs and notified from time to time.
The PM E-DRIVE scheme is aimed at accelerating the adoption of electric vehicles, setting up charging infrastructure and developing the electric vehicle manufacturing ecosystem in the country.
The Electric Mobility Promotion Scheme (EMPS) 2024, which was implemented from April 1 to September 30, 2024, was subsumed under PM E-DRIVE.
The government said the scheme is fund-limited, with total payouts capped at the overall outlay of ₹11,900 crore.
“If funds for the scheme or any of its components are exhausted before March 31, 2028, the relevant component will be closed, and no further claims will be entertained,” the notification read.
The ministry has also said that March 31, 2028, will be the terminal date for all segments under the scheme. No payments will be made by the Ministry of Heavy Industries or the programme implementation agency after that date.
As the target sales for registered electric three-wheelers in the L5 category have already been achieved, the segment was closed on December 26, 2025, the ministry said.
The last date for submission of claims to the Ministry or programme implementation agency for any component of the scheme will be December 31, 2027.
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