The government has extended the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme by one year, pushing its deadline to March 31, 2028. However, incentives for electric two-wheelers have been reduced by 50% as part of the revised framework.
Under the updated scheme, the subsidy for electric two-wheelers has been lowered to ₹2,500 per kWh from the earlier ₹5,000 per kWh. The maximum incentive available per vehicle has also been reduced to ₹5,000 from ₹10,000 in FY25.
The revised incentive will apply to electric two-wheelers with an ex-factory price of up to ₹1.5 lakh.
PM E-DRIVE scheme outlay remains unchanged
According to a notification issued by the Ministry of Heavy Industries, the total financial allocation for the scheme remains unchanged at ₹11,900 crore. The PM E-DRIVE scheme was introduced in September 2024 and was initially scheduled to continue until March 31, 2027.
The government has allocated around ₹2,767 crore for incentives linked to registered electric two-wheelers. The scheme can provide support for a maximum of 45,79,120 registered electric two-wheelers.
The incentive amount will also be restricted to 15% of the ex-factory price of an electric two-wheeler or electric three-wheeler, whichever is lower. The government has retained the option to revise the per kWh incentive depending on future reductions in vehicle costs.
The PM E-DRIVE scheme is aimed at increasing electric vehicle adoption, expanding charging infrastructure and strengthening the EV manufacturing ecosystem in India.
Scheme to continue with fund-based limitations
The Electric Mobility Promotion Scheme (EMPS) 2024, which operated from April 1 to September 30, 2024, has been merged into the PM E-DRIVE framework.
The government clarified that the scheme is limited by available funds, with total payouts restricted to the approved allocation of ₹11,900 crore. If funds allocated for any component are exhausted before March 31, 2028, that segment will be discontinued and no further claims will be accepted.
The Ministry of Heavy Industries has also specified that March 31, 2028, will be the final date for all categories covered under the scheme. No payments will be released by the ministry or the programme implementation agency after this date.
The electric three-wheeler L5 category has already reached its sales target and was closed on December 26, 2025.
The final date for submitting claims under any component of the scheme has been set as December 31, 2027.
