PM E-Drive Scheme Extended Until 2028

However, financial support for electric two- and three-wheelers will cease by March 2026.

The Centre has extended its flagship electric vehicle incentive programme, the Prime Minister Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme, by two years until March 2028, confirmed the Ministry of Heavy Industries.

However, the extension comes with a significant caveat as financial support for electric two and three-wheelers will cease by March 31, 2026, marking a strategic shift in government policy. Moreover, should funds be exhausted before March 2028, the scheme will close automatically, though the terminal date for registered electric two-wheelers and three-wheelers remains fixed at March 31, 2026.

Scheme Details and Financial Allocation

The comprehensive ₹10,900 crore initiative originally launched on October 1, 2024, with an initial deadline of March, 2026. The programme aims to accelerate India's transition to electric mobility through purchase incentives and infrastructure development.

Under the scheme's framework, ₹3,679 crore has been designated for demand incentives covering electric two-wheelers, three-wheelers, ambulances and trucks. An additional ₹7,171 crore will support electric bus adoption, public charging network expansion and testing facility improvements.

The ambitious targets include supporting 24.79 lakh electric two-wheelers, 3.16 lakh three-wheelers, 14,028 buses and trucks, alongside establishing 88,500 electric vehicle charging points across the country.

Subsidy Structure and Recent Changes

The government commenced subsidising electric two and three-wheelers from October, 2024 while electric truck subsidies were introduced later in July 2025. Guidelines for electric ambulance incentives and charging infrastructure support remain under development.

Initial subsidy rates began at ₹5,000 per kWh for electric two-wheelers with a maximum cap of ₹10,000 per vehicle. However, these rates were reduced by half to ₹2,500 per kWh from April 2025, signalling a gradual reduction in fiscal support.

New Vehicle Categories and Future Plans

Electric trucks with gross vehicle weight between 3.5 and 55 tonnes became eligible for subsidies in July, calculated at ₹5,000 per kWh or up to 10% of the ex-factory price, whichever proves lower.

Infrastructure Focus and Fund Limitations

The scheme places considerable emphasis on charging infrastructure development, allocating ₹2,000 crore to support 22,100 fast chargers for four-wheelers, 1,800 for buses, and 48,400 for two and three-wheelers. Charging station subsidy guidelines are currently being finalised.

The programme operates under strict financial constraints, with official notifications stating: "This is a fund-limited scheme. Total payout under the Scheme shall be limited to the scheme outlay of ₹10,900 crore."

Policy Shift Towards Market Maturity

The decision to end two and three-wheeler subsidies by 2026 reflects government belief that segments achieving 10% electric vehicle penetration no longer require demand incentives. This represents a deliberate transition from fiscal dependency as the electric vehicle market matures.

However, subsidies remain crucial for early-stage adoption which helps reduce upfront vehicle costs, but the government appears confident that established segments can sustain growth independently moving forward.