Centre extends PM E-Drive by two years, till 2027-28

The government has extended the ₹10,900-crore PM E-Drive scheme by two fiscal years, until 2027-28, as a large portion of the scheme’s corpus remains unused.

About half of the scheme’s funds, allocated to ease the upfront cost of more than 14,000 electric buses, more than 5,600 electric trucks, and over 72,000 electric vehicle public charging stations, have remained unused.

Initiated in October 2024 after subsuming the Electric Mobility Promotion Scheme (EMPS), it was set to run until the end of 2025-26. It will now end once its full corpus is exhausted, according to the ministry of heavy industries’ 7 August gazette notification.

However, incentives for electric two- and three-wheelers will be discontinued from the end of 2025-26.

It was the government’s third incentive scheme to bolster the adoption of electric mobility in the country. It facilitated the sale of zero-emission vehicles to consumers at a discount, which the government reimbursed.

Earlier, two iterations of the Faster Adoption and Manufacturing of Electric (and Hybrid) Vehicles in India, or FAME India, ran for five years each from 2014-15 to 2023-24.

The PM E-Drive’s planned expenditure on electric buses was a key differentiating factor from earlier electric mobility incentive schemes, such as FAME.

As of April, the ministry of heavy industries had given ₹422 crore worth of incentives for electric two- and three-wheelers under the scheme, according to a 1 April Lok Sabha disclosure.

Electric mobility push

The EV incentive scheme forms a crucial part of the government’s multi-pronged approach to boost the adoption of electric mobility in the country. It is responsible for demand-side incentives, providing direct benefits to consumers on the purchase of an EV, in tandem with supply-side incentives provided by the government under the ₹25,938-crore production-linked incentive scheme for automobiles and automotive components.

Automakers get benefits for manufacturing zero-emission vehicles under the PLI-Auto scheme.

Additionally, the government has relaxed the goods and services tax (GST) on the purchase of an EV to 5%, against a 28% levy on fossil-fuel vehicles.

The announcement of the PM E-Drive’s extension came days after the government think tank NITI Aayog batted for strengthening the push on electric mobility by proposing disincentives for fossil fuel vehicles in addition to incentives for cleaner mobility.

Schemes such as FAME and PM E-Drive have been instrumental in generating consumer support for cleaner mobility. Mint reported in April that the presence of a long-term scheme—the PM E-Drive—had bolstered the sales of EVs in April, as opposed to a year ago, when the second iteration of the FAME India ended.

Now, the extension of the PM E-Drive for two more years is likely to generate demand for electric two- and three-wheelers until the March 2026 cut-off date, said Nikhil Dhaka, vice president of public policy at Primus Partners.

He added that this is also an opportunity for electric bus adoption. “The extension is a positive step for India’s EV ecosystem, especially for the electric bus segment. It gives state transport bodies and private operators a longer runway to plan deployments, align procurement cycles, scale manufacturing, and strengthen charging infrastructure without rushing against the clock.”