The Ministry of Heavy Industries (MHI) has announced revisions to the PM E-DRIVE initiative, aimed at promoting electric vehicles (EVs) in India. The updated guidelines extend the subsidy timelines and increase targets for electric two-wheelers (E2Ws) and electric three-wheelers (E3Ws).
Key updates include:
- E2Ws registered by July 31, 2026, will now qualify for incentives.
- E3Ws will continue to receive subsidies until March 31, 2028.
- Previously, incentives for these vehicles were set to expire in March 2026.
Additionally, the government has established price limits for qualifying vehicles. E2Ws priced over ₹1.5 lakh and E3Ws over ₹2.5 lakh will not be eligible for subsidies.
Subsidy amounts will depend on battery capacity:
- E2Ws can receive up to ₹5,000 per kWh, capped at ₹10,000 per vehicle.
- This support will decrease to ₹2,500 per kWh later, with a cap of ₹5,000.
- For e-rickshaws and e-carts, incentives are set at ₹5,000 per kWh, capped at ₹25,000.
- These amounts will later drop to ₹2,500 per kWh, capped at ₹12,500.
All incentives will be limited to 15% of the vehicle's ex-factory price, whichever is lower. The allocation for e-rickshaws and e-carts has been reduced to ₹50 crore, reflecting slower adoption in this sector. Meanwhile, the L5 category of electric three-wheelers has already met its target, leading to its closure on December 26, 2025.
The government has also increased the target for E2Ws from 14 lakh to 24.8 lakh and for E3Ws from 36,400 to over 39,000.
The PM E-DRIVE initiative, launched in September 2024 with a budget of ₹10,900 crore, aims to enhance EV adoption through subsidies, improved charging infrastructure, and support for local manufacturing.
As India’s EV market is projected to reach $132 billion by 2030, these revisions come at a crucial time for the growing ecosystem.
