PM E-DRIVE Announced With ₹10,900 Crore Plan; Still No Relief For Electric 4-Wheelers

The Indian government has launched the PM Electric Drive (E-DRIVE) subsidy scheme, aimed at boosting the country’s adoption of electric vehicles (EVs) and accelerating its transition to sustainable mobility. With a significant outlay of ₹10,900 crore, the scheme will be implemented from October 1, 2024, through March 31, 2026. This initiative seeks to increase the penetration of electric two-wheelers (e-2Ws), three-wheelers (e-3Ws), electric buses and emerging EV categories, including e-trucks and e-ambulances. 

Also Read: New PM E-DRIVE Scheme To Replace FAME For EV Adoption, ₹10,900 Crore Allotted

The PM E-DRIVE Scheme follows the government's earlier efforts under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME) programs. The FAME-I scheme was first introduced in 2015, with an initial allocation of ₹795 crore, later expanded to ₹895 crore. After assessing its impact, the FAME-II scheme was rolled out in 2019, with a much larger budget of ₹10,000 crore, which was eventually increased to ₹11,500 crore. The FAME-II initiative played a crucial role in supporting electric mobility up until March 2024. 

From April 1, 2024, to September 30, 2024, the government introduced the Electric Mobility Promotion Scheme 2024 (EMPS-2024) with a relatively smaller allocation of ₹778 crore. This scheme now stands subsumed under the more comprehensive PM E-DRIVE program. 

Also Read: PM E-Drive Scheme’s New Programme To Support Local Manufacturing Of EV Components

The core objective of the scheme is to reduce the acquisition cost of electric vehicles for consumers, making EVs more affordable. For the fiscal year 2024-25, the scheme proposes demand incentives of ₹5,000 per kWh for electric two-wheelers and three-wheelers, including registered e-rickshaws and e-carts. However, this incentive will be reduced to ₹2,500 per kWh for the fiscal year 2025-26. The subsidy extends to e-ambulances, e-trucks, and other upcoming EV categories, helping to lower their upfront costs. 

Recognising the need for a strong EV ecosystem, the PM E-DRIVE Scheme allocates ₹7,171 crore for capital asset creation, which includes building a network of charging stations, upgrading EV testing agencies and supporting the rollout of e-buses. The government aims to deploy 14,000 e-buses across India by 2026. Additionally, the scheme targets the establishment of 2,000 charging stations nationwide, addressing the current deficit in EV charging infrastructure. 

Also Read: ₹500 Crore Electric Mobility Promotion Scheme Kicks In From April 1

The central government has also encouraged states to provide supplementary support to enhance the scheme's effectiveness. States are being urged to offer fiscal and non-fiscal incentives, such as road tax waivers, exemptions from permits, and concessional parking fees, creating a more favourable environment for EV adoption. The scheme also promotes concessional toll fees and other local incentives to further ease the transition to electric mobility.

The ₹10,900 crore subsidy is spread across two fiscal years, with ₹5,047 crore allocated for FY 2024-25 and ₹5,853 crore for FY 2025-26. This fund will support demand incentives, capital asset creation, and administrative needs for the scheme's implementation.

A committee chaired by the Secretary of Heavy Industries will oversee the PM E-DRIVE scheme. This body has the authority to address any challenges during the implementation process, including making adjustments to demand incentives, increasing the number of e-buses, and providing approval guidelines for EV testing agencies.