The government has announced a major update for people planning to buy electric vehicles in India as the PM E-DRIVE scheme has been extended until March 31, 2028. However, the incentive available on electric two-wheelers has been reduced, with the subsidy per kilowatt-hour (kWh) cut by half. With the revised rules now in place, prospective EV buyers need to understand how the new incentive structure will affect the benefits available to them.
PM E-DRIVE scheme extended till March 2028
According to a notification issued by the Ministry of Heavy Industries, the PM E-DRIVE scheme will now remain operational until March 31, 2028. The scheme is aimed at promoting electric mobility in the country, developing charging infrastructure and strengthening India’s EV manufacturing ecosystem. The government has allocated a total budget of Rs 11,900 crore for the scheme. However, PM E-DRIVE is a fund-limited scheme. This means that if the allocated funds are exhausted, the relevant component of the scheme may be closed before the scheduled end date.
Subsidy on electric two-wheelers cut by half
Under the revised structure, the incentive for electric two-wheelers has been reduced from Rs 5,000 per kWh to Rs 2,500 per kWh. The maximum incentive available per vehicle has also been capped at Rs 5,000. In comparison, during the financial year 2024-25, electric two-wheelers were eligible for an incentive of Rs 5,000 per kWh, with a maximum benefit of Rs 10,000. This effectively means that the maximum incentive available to eligible electric two-wheeler buyers has been reduced by 50 per cent.
Which electric vehicles will qualify for the incentive?
The incentive will be available for eligible electric two-wheelers with a maximum ex-factory price of Rs 1.5 lakh. The Ministry of Heavy Industries has earmarked Rs 2,767 crore in fund support for electric two-wheelers under the scheme. However, buyers will not automatically receive the full incentive amount. The benefit will be limited to the lower of the applicable incentive amount or 15 per cent of the vehicle’s ex-factory price. The government may also review the per-kWh incentive from time to time, taking changes in vehicle prices into account.
Claims must be submitted by December 31, 2027
Although the PM E-DRIVE scheme will continue until March 31, 2028, the deadline for submitting claims under any component of the scheme is December 31, 2027. Companies and other eligible beneficiaries will therefore need to ensure that their claims are submitted within the prescribed deadline to avail themselves of the applicable benefits.
What does the revised subsidy mean for EV buyers?
The extension of PM E-DRIVE provides a longer policy window for India’s electric vehicle ecosystem, but the reduction in incentives means buyers of electric two-wheelers will receive a smaller subsidy than they did earlier. For consumers planning an EV purchase, the key factors to check will now include the vehicle’s ex-factory price, battery capacity and the applicable incentive ceiling under the revised scheme.
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