The demand subsidies for electric two-wheelers under the PM E-Drive scheme have been extended until July 31, 2026. This marks an extension of four months for the subsidy scheme that was slated to end on March 31, 2026.
1. As of January 27, a total of 22.12 lakh EVs have been sold under the scheme
2. Effective April 1, 2025, incentive was halved to Rs 2,500/kWh, capped at Rs 5,000 per vehicle
3. Operational guidelines for public EV charging infrastructure setup were released recently
PM E-Drive deadline extended
The target was to support 24.79 lakh electric two-wheelers.
The Rs 10,900 crore scheme provides incentives for the purchase of electric vehicles, including two-wheelers, three-wheelers, buses, trucks and ambulances, and for setting up charging infrastructure. It was launched in October 2024 and was supposed to expire on March 31, 2026.
While the government had last year extended the PM E-Drive scheme’s overall tenure to March 31, 2028, it had indicated at the time that demand incentives for electric two-wheelers would be discontinued by March 31, 2026.
However, the latest amendment to the scheme has revised those timelines, extending the subsidy window for electric two-wheelers until July 31, 2026, effectively providing an additional four months of support beyond the earlier cut-off. Subsidies for electric three-wheelers, including e-rickshaws and e-carts, will continue until March 31, 2028.
The Ministry of Heavy Industries reiterated that the scheme remains fund-limited, with an overall outlay of Rs 10,900 crore, and will close earlier if allocated funds are exhausted before the terminal date.
The incentive for electric two-wheelers was reduced to Rs 2,500 per kWh, capped at Rs 5,000 per vehicle, from Rs 5,000 per kWh, with a cap of Rs 10,000 per vehicle, effective April 1, 2025. The maximum ex-factory price eligible for subsidy support remains capped at Rs 1.5 lakh.
The PM E-Drive scheme came with a target of providing demand incentives worth Rs 3,679 crore on the purchase of electric two-wheelers, three-wheelers, ambulances and trucks, while Rs 7,171 crore has been set aside to boost the adoption of electric buses, improve public charging infrastructure, and upgrade testing infrastructure.
The target was to support 24.79 lakh electric two-wheelers. The subsidies given on the purchase of electric vehicles are instrumental in driving the early-stage adoption of electric vehicles, as incentives help in reducing the upfront cost of the vehicle. As EV adoption grows, the government has been progressively scaling back subsidies, signalling a deliberate policy shift away from fiscal dependency.
As of January 27, 2026, a total of 22.12 lakh EVs have been sold under the scheme, including 19.19 lakh e-2Ws and 2.93 lakh e-3Ws. Around Rs 1,703 crore has been reimbursed to two-wheeler and three-wheel OEMs.
The operational guidelines for setting up public EV charging infrastructure under the scheme were released only recently, and incentive disbursals for this have yet to begin. The scheme targets the installation of 22,100 fast chargers for four-wheelers, 1,800 chargers for electric buses and 48,400 chargers for two- and three-wheelers.
Vishal Venugopal
Azaman Chothia
Ved Janve
