PM E-Drive Scheme May Get Additional Budget as Government Weighs Extension of Electric Two-Wheeler Subsidies

The Ministry of Heavy Industries is examining a proposal to continue subsidies for domestically manufactured electric two-wheelers after the current July 31, 2026, deadline under the PM E-Drive scheme, as per The Economic Times report.  

Officials noted that the proposal is under consideration, but any extension would require additional budgetary support as the scheme's existing allocation has already been committed. The subsidy is expected to remain at around ₹5,000 per eligible vehicle. 

Demand Outpaces Initial Estimates 

Electric vehicle adoption has been higher than projected since the PM E-Drive scheme was launched in September 2024. Official data shows that electric two-wheeler sales have reached around 2.7 million units, crossing the scheme's target of 2.5 million.  

Electric three-wheelers have also exceeded expectations, with sales of about 297,000 units against the target of 289,000. The faster uptake has led to quicker utilisation of the subsidy allocation. 

Majority of Allocated Funds Already Used 

The government had set aside ₹1,772 crore to support electric two-wheeler purchases under the scheme. By the end of March, ₹1,259.91 crore had already been disbursed, according to reports citing official estimates. 

For electric three-wheelers, ₹907 crore was allocated, of which ₹737.35 crore had been utilised. Officials said the funds available under the PM E-Drive scheme have already been committed for approved components. 

Bus Deployment Remains the Largest Component 

Electric buses account for the largest share of spending under the ₹10,900-crore PM E-Drive scheme. The government has earmarked ₹4,391 crore for the deployment of 14,028 electric buses in major cities. 

Procurement has been completed for 13,800 buses, including 10,900 under the first tender and another 2,900 under the second. The remaining allocation under the scheme covers charging infrastructure and other eligible categories. 

Read More: Centre Approves 117 Tourism Infrastructure Projects Worth ₹5,756 Crore to Boost Travel Across India! 

Conclusion 

The proposal to continue subsidies is under consideration. If approved, the scheme will need additional funds as the current allocation has already been fully committed. 

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