PM E-DRIVE extended to March 2028: e-2Ws get up to ₹5,000 incentive
Synopsis
The Centre has extended the PM E-DRIVE scheme by two years to March 2028 with a ₹11,900 crore outlay — but quietly halved the per-vehicle incentive for electric two-wheelers from ₹10,000 to ₹5,000. It is a deliberate tapering signal: the government is keeping the runway long while trimming the subsidy, betting that falling EV costs will cover the gap.
Key Takeaways
The PM E-DRIVE scheme has been extended by two years to 31 March 2028 with a total outlay of ₹11,900 crore .
Electric two-wheelers will receive a purchase incentive of ₹2,500 per kWh , capped at ₹5,000 per vehicle — half the ₹10,000 ceiling available in FY2024-25 .
Eligible e-2Ws must have a maximum ex-factory price of ₹1.5 lakh .
The scheme covers a maximum of 45,79,120 electric two-wheelers , with ministry funding capped at ₹2,767 crore for this segment.
The scheme is fund-limited; components may close early if allocations are exhausted.
Claims must be submitted by 31 December 2027 .
The Ministry of Heavy Industries has extended the PM E-DRIVE scheme by two years to 31 March 2028, with electric two-wheelers (e-2Ws) continuing to attract purchase incentives as part of the Centre's push to accelerate electric vehicle adoption and deepen domestic manufacturing capacity. The total outlay under the extended scheme stands at ₹11,900 crore.
Key Provisions for Electric Two-Wheelers
Registered electric two-wheelers will be eligible for purchase incentives for the period from 1 April 2025 to 31 March 2028. The incentive has been fixed at ₹2,500 per kilowatt-hour, subject to a ceiling of ₹5,000 per vehicle. To qualify, an e-2W must carry a maximum ex-factory price of ₹1.5 lakh.
The scheme will support a maximum of 45,79,120 electric two-wheelers, with total funding support from the ministry capped at ₹2,767 crore for this segment. The incentive will be capped at the specified amount or 15 per cent of the vehicle's ex-factory price, whichever is lower.
A Step Down from Previous Incentive Levels
Notably, the revised incentive marks a reduction from the support available during FY2024-25, when electric two-wheelers were eligible for ₹5,000 per kWh, capped at ₹10,000 per vehicle — double the current ceiling. The government has, however, indicated that the per-kWh incentive may be reviewed periodically, depending on reductions in vehicle costs. This tapering is consistent with a broader policy approach of gradually reducing direct subsidies as the EV market matures and production costs decline.
Scheme Structure and Fund Limits
The PM E-DRIVE scheme will operate as a fund-limited programme, meaning total payouts are hard-capped at the overall outlay of ₹11,900 crore. If allocations for any component are exhausted before the terminal date, that component will be closed and no further claims entertained. 31 March 2028 is the terminal date for all scheme segments, while 31 December 2027 is the last date for submission of claims.
Broader Scheme Objectives
Beyond two-wheelers, the PM E-DRIVE scheme encompasses the development of EV charging infrastructure and the strengthening of India's EV manufacturing ecosystem. The two-year extension signals the Centre's continued commitment to the electric mobility transition, even as it recalibrates subsidy intensity to reflect evolving market conditions.
With India's EV sector still heavily reliant on policy support to drive volumes, the extension provides industry stakeholders a longer runway for planning, though the lower per-vehicle incentive may temper demand momentum in the near term.
Point of View
000 to ₹5,000 — while extending the timeline is a calibrated retreat: the government is betting that declining battery costs will absorb the subsidy cut. That bet may hold for premium e-2Ws, but it risks slowing adoption at the entry-level price point, where the ₹1.5 lakh ex-factory cap already excludes a large share of the market. The fund-limited structure also introduces uncertainty — if volumes surprise on the upside, the scheme could close early, undermining the very planning horizon the extension was meant to provide.
NationPress
11 Aug 2026
Frequently Asked Questions
What is the PM E-DRIVE scheme and why has it been extended?
The PM E-DRIVE scheme is a central government programme aimed at accelerating electric vehicle adoption, building charging infrastructure, and strengthening India's EV manufacturing ecosystem. It has been extended by two years to 31 March 2028, with a total outlay of ₹11,900 crore, to provide the industry a longer runway for investment and planning.
How much incentive will electric two-wheeler buyers receive under the extended scheme?
Buyers of eligible electric two-wheelers will receive an incentive of ₹2,500 per kilowatt-hour, capped at ₹5,000 per vehicle, or 15 per cent of the ex-factory price — whichever is lower. The vehicle must be priced at or below ₹1.5 lakh (ex-factory) to qualify.
How does the new incentive compare to the previous one?
The incentive has been reduced significantly. During FY2024-25, electric two-wheelers were eligible for ₹5,000 per kWh, with a cap of ₹10,000 per vehicle. The revised scheme cuts the per-vehicle ceiling to ₹5,000 — a 50 per cent reduction — reflecting the government's intent to gradually taper subsidies as EV costs fall.
How many electric two-wheelers are covered under the scheme?
The scheme provides support for a maximum of 45,79,120 electric two-wheelers, with total ministry funding for this segment capped at ₹2,767 crore. Once this allocation is exhausted, no further claims will be entertained, even if the March 2028 deadline has not been reached.
What is the deadline for submitting claims under PM E-DRIVE?
All claims under the PM E-DRIVE scheme must be submitted by 31 December 2027. The terminal date for all scheme segments is 31 March 2028. If funds for any component are exhausted before these dates, that component will be closed early.
