PM E-Drive EV Subsidy Extended To March 2028; Incentive For E2Ws Cut To Rs 5,000

The Ministry of Heavy Industries (MHI) has announced the extension of the PM E-Drive scheme for electric vehicles. The scheme was earlier scheduled to remain in effect until March 31, 2026.

Originally announced on September 29, 2024, the scheme was operational from October 1, 2024, to March 31, 2026, with a total outlay of Rs 10,900 crore and incentives of up to Rs 10,000 per vehicle. It also included the Electric Mobility Promotion Scheme. The initiative primarily covered electric two-wheelers, e-rickshaws, e-carts and L5 electric three-wheelers.

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The government notified an extension in August 2025, taking the scheme's validity to March 31, 2028, under the same conditions. A second extension was announced in March 2026, extending the scheme until July 31, 2026.

Now, the Ministry of Heavy Industries has notified a third extension, this time introducing changes to the incentive structure. The incentive for electric two-wheelers has been reduced from Rs 5,000 per kWh to Rs 2,500 per kWh, bringing the maximum incentive down from Rs 10,000 to Rs 5,000 per vehicle.

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At the same time, the government has increased the scheme's outlay by Rs 1,000 crore, taking the total allocation to Rs 11,900 crore. The revised scheme will support a maximum of 45,79,120 electric two-wheelers. EVs priced at up to Rs 1.50 lakh are eligible for the incentive.

The PM E-Drive scheme aims to encourage the adoption of electric vehicles while supporting the development of EV infrastructure, including charging stations. It also seeks to promote the use of electric vehicles in public transport.