Government Reduces Electric 2-Wheeler Subsidy to ₹5,000, Extends PM E-DRIVE to March 2028

The government's PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme will now remain operational until March 31, 2028, extending its original March 31, 2027, end date by one year, as per news reports. 

The scheme, introduced in September 2024, will retain its overall ₹11,900 crore outlay, while the incentive structure for electric two-wheelers has been revised. 

E2W Incentive Reduced to ₹2,500 per kWh 

The incentive for registered electric two-wheelers has been reduced from ₹5,000 per kWh to ₹2,500 per kWh. 

The maximum benefit has also been lowered to ₹5,000 per e2W, compared with ₹10,000 per vehicle in FY25. Eligible vehicles must have an ex-factory price of up to ₹1.5 lakh. 

The incentive is additionally capped at 15% of the e2W or e3W's ex-factory price, whichever is lower. 

₹2,767 Crore Set Aside for Electric Two-Wheelers 

Around ₹2,767 crore has been allocated for registered e2W incentives. The scheme can support a maximum of 45,79,120 registered electric two-wheelers. 

The government may revise the per-kWh incentive depending on reductions in vehicle costs. 

Scheme Covers EV Adoption and Infrastructure 

PM E-DRIVE is focused on increasing electric vehicle adoption, expanding charging infrastructure and developing the country's electric vehicle manufacturing ecosystem. 

The Electric Mobility Promotion Scheme 2024, implemented from April 1 to September 30, 2024, was subsumed under PM E-DRIVE. 

Fund Limit and Key Deadlines 

The scheme remains limited to its ₹11,900 crore overall allocation. If funds for any component are exhausted before March 31, 2028, that component will close without accepting further claims. 

The L5 electric three-wheeler segment was closed on December 26, 2025, after achieving its target sales. 

The final date for submitting claims for any component is December 31, 2027, while no payments will be made after March 31, 2028. 

Read More: Government Rules Out Ethanol-Diesel Blending After Tests; Studies Ethanol as Cooking Fuel Alternative! 

Conclusion 

The PM E-DRIVE extension adds another year to the scheme while reducing the per-kWh benefit available to electric two-wheelers. The overall allocation remains unchanged at ₹11,900 crore. 

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