Automobile Desk – The Central Government has taken an important step with the aim of promoting the use of electric vehicles in the country. It has been decided to extend the time limit of the government's ambitious PM E-Drive scheme and keep it in force till March 31, 2028. Along with this, the government has also made a huge increase in the financial budget available under this scheme, which will directly benefit the customers purchasing electric two-wheeler (E2W) vehicles.
According to the new guidelines issued by the Ministry of Heavy Industries, the allocation for the electric two-wheeler segment has been increased by an additional Rs 1,000 crore. Earlier, Rs 1,772 crore was earmarked for this category, which has now been increased to Rs 2,767 crore. With this increase in funds, more people in the country will be able to buy electric two-wheelers at concessional rates.
Under the revised rules of the scheme, the mathematics of subsidy on electric two-wheelers to be registered between April 1, 2025 and March 31, 2028 has been decided. Now subsidy of Rs 2,500 per kilowatt-hour (kWh) will be given based on the battery capacity of the vehicles. However, this financial rebate per vehicle will be limited to a maximum of Rs 5,000.
The government has also clearly mentioned that the benefit of subsidy will be available only to those electric two-wheelers whose ex-showroom price is Rs 1.5 lakh or less. Additionally, the amount of incentive to be given will be decided on the basis of 15 percent of the total ex-showroom price of the vehicle or a maximum of Rs 5,000 (whichever is lower).
If we talk about the previous arrangement, in the financial year 2024-25, the government was giving an incentive of Rs 5,000 per kilowatt-hour up to a maximum of Rs 10,000, which has been reduced to half from April 1, 2025. Initially when the PM e-Drive scheme was introduced in October 2024, it was made only for two years i.e. till March 2026. But now the new deadline will provide a longer period to both two-wheeler manufacturers and buyers.
Even though the last period of this revised policy has been kept as 31 March 2028, the last date for filing incentive claims for vehicle manufacturers and sellers has been fixed as 31 December 2027. Claims submitted after this deadline will not be considered. Overall, the government has prepared a comprehensive budget of Rs 11,900 crore for the implementation of this entire PM e-Drive scheme, which will give a strong impetus to the green transportation system in the country.