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PM E-Drive Scheme for EVs Extended Till 2028; Electric Two-Wheeler Subsidy Cut to Rs 5,000
The PM E-Drive scheme has been extended until March 31, 2028, with a significant reduction in incentives for eligible electric two-wheelers, now capped at Rs 5,000 per vehicle.
Atul Bandhu
Updated Aug 11, 2026, 05:03 PM IST
PM E-Drive Scheme for EVs Extended Till 2028; Electric Two-Wheeler Subsidy Cut to Rs 5,000
The government has extended the PM E-Drive scheme by one year, with the programme now set to continue until March 31st 2028. At the same time, the incentive available on eligible electric two-wheelers has been reduced by half to a maximum of Rs 5,000 per vehicle.
The Ministry of Heavy Industries announced the amendments through a notification issued on August 10. While the overall PM E-Drive outlay remains unchanged at Rs 11,900 crore, the subsidy allocation for registered electric two-wheelers stands at Rs 2,767 crore.
PM E-Drive Subsidy for Electric Two-Wheelers
Under the revised structure, eligible electric two-wheelers will receive an incentive of Rs 2,500 per kWh, subject to a maximum benefit of Rs 5,000 per vehicle. This is lower than the Rs 5,000 per kWh incentive and Rs 10,000 per vehicle cap applicable during FY2024-25.
The subsidy is also limited to 15 percent of the vehicle's ex-factory price, whichever is lower. To qualify for the incentive, an electric two-wheeler must have an ex-factory price of up to Rs 1.5 lakh.
The government has allocated enough funds under the scheme to support a maximum of 45,79,120 registered electric two-wheelers. The incentive rate per kWh can also be reviewed periodically, depending on factors such as reductions in vehicle costs.
PM E-Drive Scheme Extended till March 2028
The PM E-Drive scheme was originally scheduled to remain operational until March 31st 2027. The latest amendment extends its terminal date to March 31st 2028.
However, the scheme remains fund-limited. This means that the relevant component can be closed before the terminal date if its allocated funds or target number of vehicles is exhausted.
The last date for submitting claims to the Ministry of Heavy Industries or the Project Management Agency is December 31st 2027. No payments will be made under the scheme after March 31st 2028.
Electric Three-Wheeler Incentive Already Closed
The latest notification also confirms that incentives for registered electric three-wheelers in the L5 category are no longer available. The target for this segment was achieved, resulting in its closure on December 26th 2025.
The PM E-Drive scheme was notified in September 2024 and subsumed the Electric Mobility Promotion Scheme (EMPS) 2024, which operated between April and September 2024.
PM E-Drive Scheme: What It Means For EV Buyers
The extension gives manufacturers and buyers another year to access the PM E-Drive benefits, but the lower incentive means that eligible electric two-wheelers will receive a smaller upfront subsidy than they did during FY2024-25.
With the maximum incentive now limited to Rs 5,000, the impact of the subsidy on the final purchase price will depend on the battery capacity and ex-factory price of the electric two-wheeler. The scheme continues to focus on mass-market electric two-wheelers priced within the Rs 1.5 lakh ex-factory limit.
The government has retained the overall Rs 11,900 crore PM E-Drive allocation, with the scheme also covering other components aimed at supporting electric mobility, charging infrastructure and the EV manufacturing ecosystem in India.
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