Union Minister H.D. Kumaraswamy, heading the Ministry of Heavy Industries (MHI), recently announced the extension of the Pradhan Mantri Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme by an additional two years, now set to continue until 31st March 2028. This extension marks a significant boost to India’s ambitious push towards electric mobility and sustainable transportation.
Initially, the PM E-DRIVE Scheme was notified for a period of two years, valid until 31st March 2026. While the incentives for electric two-wheelers and three-wheelers will conclude by March 2026 as per the original plan, the scheme’s subsidies will continue for other vehicle categories, including electric buses, electric trucks, and electric ambulances, subject to fund availability. These subsidies will be provided until the extended deadline of March 2028, reinforcing the government’s commitment to the electrification of commercial and public transport sectors.
Objective and Vision of PM E-DRIVE
Launched on September 29, 2024, by the Ministry of Heavy Industries, the PM E-DRIVE Scheme is designed to accelerate the adoption of Electric Vehicles (EVs) across India. With a generous budget outlay of ₹10,900 crore, the scheme primarily focuses on fostering a comprehensive ecosystem for EV manufacturing, developing robust charging infrastructure, and promoting faster uptake of electric mobility—especially in commercial and public transport segments.
The initiative reflects India’s vision to transition towards cleaner, greener transportation options that reduce dependency on fossil fuels and cut down carbon emissions, aligning with the country’s broader climate goals.
Incentives Under the Scheme
Under the PM E-DRIVE scheme, buyers of electric two- and three-wheelers are entitled to demand incentives calculated based on battery capacity. For the financial year 2025 (FY25), the incentive is set at ₹5,000 per kilo watt-hour (kWh), while for FY26, it reduces to ₹2,500 per kWh. However, these incentives are capped at 15% of the ex-factory vehicle price to ensure cost-effectiveness and market sustainability.
These financial incentives significantly lower the upfront cost of electric two- and three-wheelers, making them more accessible and attractive to consumers. This is crucial for achieving scale in electric mobility, especially among urban commuters and commercial users.
Impact on EV Ecosystem and Industry
The extension of PM E-DRIVE scheme’s tenure underscores the government’s intent to sustain momentum in electric vehicle adoption beyond initial years. By continuing subsidies for larger electric vehicles like e-buses, e-trucks, and e-ambulances, the policy aims to catalyse cleaner public transportation and logistics sectors, which have a higher environmental impact.
This policy continuity also encourages manufacturers to ramp up production capacity, invest in research and development, and innovate in EV technologies, knowing that government support remains assured. Furthermore, the emphasis on strengthening charging infrastructure will address range anxiety and boost consumer confidence in EVs.
The extension of the PM E-DRIVE Scheme till March 2028 represents a crucial milestone in India’s electric mobility journey. It offers sustained incentives and policy support for key segments, fostering a cleaner, sustainable transportation ecosystem. With continued government backing, India is poised to accelerate its transition to electric vehicles, reduce pollution, and enhance energy security, aligning with its climate commitments and vision for a greener future.
