Centre Extends e-Rickshaw Subsidies till March 2028, Cuts Electric Bike Incentive Window

The Ministry of Heavy Industries has issued a fresh Gazette notification amending the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme, bringing clarity on subsidy timelines and incentive rates for electric two- and three-wheelers.

In a notification dated 27 March 2026, the Centre has set the terminal date for registered electric two-wheelers (e-2W) at 31 July 2026. Subsidies for registered e-rickshaws and e-carts (e-3W) have been extended till 31 March 2028. The L5 category of e-3 wheelers was already closed on 26 December 2025 after achieving its target.

The scheme remains fund-limited with a total outlay of ₹10,900 crore. For e-2 wheelers, the incentive has been reduced from ₹5,000 per kWh (capped at ₹10,000 per vehicle) in FY 2024-25 to ₹2,500 per kWh (capped at ₹5,000 per vehicle) from 1 April 2025 to 31 July 2026. A maximum of 24,79,120 vehicles will be supported with an allocation of ₹1,772 crore. The maximum eligible ex-factory price remains ₹1.5 lakh.

Also read: Govt to Lose ₹7,000 Crore in Two Weeks After Fuel Duty Cut

For e-rickshaws and e-carts, the incentive will be ₹5,000 per kWh (capped at ₹25,000 per vehicle) in FY 2024-25 and ₹2,500 per kWh (capped at ₹12,500 per vehicle) in FY 2025-26. The scheme will support 39,034 vehicles with ₹50 crore allocated. The maximum ex-factory price eligible for incentive is ₹2.5 lakh.

In all cases, the incentive will be limited to the lower of the prescribed rate or 15% of the vehicle’s ex-factory price. The amendments aim to ensure efficient utilisation of limited funds while continuing support for the critical e-rickshaw segment that serves last-mile connectivity and generates employment in urban and semi-urban areas.