The government has issued a major update for electric vehicle buyers. The PM e-Drive scheme has now been extended till March 31, 2028. However, the subsidy available to buyers of electric two-wheelers has been reduced. The government has halved the per kilowatt-hour (kWh) incentive. Therefore, it is important for people planning to buy an EV to understand the new system.
According to a notification issued by the Ministry of Heavy Industries, the PM e-Drive scheme will now run till March 31, 2028. The scheme aims to promote electric vehicles in the country, develop charging infrastructure and strengthen the EV manufacturing ecosystem. The government has allocated a budget of ₹11,900 crore for this entire scheme. However, this is a fund-limited scheme. This means that if the allocated funds are exhausted, the scheme or any part of it can be prematurely discontinued.
Under the new system, the incentive for electric two-wheelers has been reduced from ₹5,000 per kWh to ₹2,500 per kWh. Additionally, the maximum incentive per vehicle will now be ₹5,000. In FY 2024-25, e-two-wheelers were earlier getting an incentive of ₹5,000 per kWh, up to a maximum of ₹10,000. This means that the maximum benefit is now halved.
To be eligible for the incentive, the maximum ex-factory price of an electric two-wheeler has been fixed at ₹1.5 lakh. The Ministry of Heavy Industries has provided financial assistance for this, totaling ₹2,767 crore. However, the incentive will be available only up to the specified limit or 15% of the ex-factory price of the vehicle, whichever is lower. The government may also review per kWh incentives based on changes in vehicle prices.