PM E-Drive Subsidy For Electric Two-Wheelers Extended Till FY28

The Central Government has extended demand incentives for electric two-wheelers under the PM E-Drive subsidy scheme until March 31, 2028. The Ministry of Heavy Industries has also increased the segment's allocation by Rs 1,000 crore, taking it to Rs 2,767 crore.

The revised allocation replaces the Rs 1,772 crore set aside earlier and raises the maximum number of eligible electric two-wheelers to 45,79,120 units. The extension gives manufacturers a longer subsidy runway, with support previously set to lapse on July 31, 2026.

Under the revised scheme, electric two-wheelers registered between April 1, 2025, and March 31, 2028, will continue to receive Rs 2,500 per kilowatt-hour of battery capacity, capped at Rs 5,000 per vehicle. The maximum ex-factory price for eligibility remains Rs 1.5 lakh.

The incentive is capped at that amount or 15 percent of the ex-factory price, whichever is lower. This rate is unchanged from April 2025, when it was cut down from Rs 5,000 per kWh, capped at Rs 10,000 per vehicle, offered through FY25.

The latest amendment also raises the overall outlay of the PM E-Drive scheme to Rs 11,900 crore, up from Rs 10,900 crore at launch in October 2024. The scheme runs from April 1, 2024, to March 31, 2028, covering vehicle incentives, charging infrastructure and manufacturing ecosystem support.

The PM E-Drive scheme was originally planned as a two-year programme ending March 31, 2026, before the government extended the overall tenure while keeping separate timelines for individual vehicle categories.

Asper the new extension for the PM E-Drive scheme, ,December 31, 2027, is the last date to submit claims to the Ministry of Heavy Industries or the implementing agency, with no payments processed after March 31, 2028. The scheme remains fund-limited, and any component can be closed early if its allocation runs out before the deadline.

Electric two-wheeler sales in India have grown sharply in recent years, rising to 14.6 lakh units in FY26 from 2,52,787 units in FY22, according to Vahan data.

The PM E-Drive scheme also covers electric three-wheelers, buses, trucks, and electric and hybrid ambulances, apart from charging infrastructure support. The subsidy for electric three-wheelers in the L5 category was closed earlier after the segment met its sales target in December 2025.