PM E-Drive Scheme Extended Until March 31, 2028 - Two & Three Wheelers Subsidies End On March 31, 2026

Published: Friday, August 8, 2025, 14:42 [IST]

The Union Government has announced an extension for the Prime Minister Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme, extending it by another two years.

The PM E-Drive Scheme, initially set to end on March 31, 2026, will now continue until March 31, 2028. However, subsidies for electric two-wheelers and three-wheelers will cease after March 31, 2026.

However, as per the notification from the Ministry of Heavy Industries announcing the extension, if funds are depleted before March 31, 2028, no further claims will be entertained by the Government.

PM E-DRIVE Scheme: Subsidies & Timeline

The PM E-DRIVE scheme was launched on October 1, 2024, with a budget of Rs 10,900 crore. It aims to incentivise the purchase of electric vehicles and establish charging infrastructure.

The scheme's objectives include providing Rs 3,679 crore in demand incentives for electric two-wheelers, three-wheelers, ambulances, and trucks. Additionally, Rs 7,171 crore is allocated to promote electric buses and enhance public charging facilities.

Subsidies under this scheme began in October 2024 for electric two and three-wheelers. However, incentives for electric trucks were only introduced in July 2024. Guidelines for subsidies on electric ambulances and charging infrastructure are still being developed.

The government intends to support the purchase of 24.79 lakh electric two-wheelers, 3.16 lakh three-wheelers, and 14,028 buses and trucks. The scheme also aims to establish 88,500 charging sites across the country.

PM E-DRIVE: Subsidy Adjustments

Initially offering Rs 5,000 per kWh for electric two-wheelers with a cap of Rs 10,000 per vehicle last year, the subsidy was reduced to Rs 2,500 per kWh in April this year.

Electric rickshaws received Rs 5,000 per kWh with a cap of Rs 25,000 per vehicle; passenger and cargo autos had a cap of Rs 50,000 per vehicle last year. These subsidies were halved from April this year as well.

In July this year, guidelines specified that incentives apply to electric trucks weighing over 3.5 tonnes but not exceeding 55 tonnes. The incentive for trucks is calculated at ₹5,000 per kWh or up to 10% of the ex-factory price.

PM E-DRIVE: Focus On Charging Infrastructure

A significant aspect of PM E-DRIVE is its emphasis on charging infrastructure development. The plan includes supporting the installation of fast chargers: approximately 22,100 for four-wheelers; around 1,800 for buses; and about 48,400 for two- and three-wheelers with an allocation of Rs 2,000 crore. Guidelines regarding subsidies for setting up these charging stations are currently being finalised.

DriveSpark Thinks

The government has been gradually reducing subsidies as EV adoption increases in India. This reflects a strategic move away from fiscal dependency towards sustainable growth within the EV sector of the Indian automotive market.