PM E-Drive Scheme For Electric Two-Wheelers Gets Extension And Higher Allocation
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The government has extended the PM E-Drive subsidy scheme for electric two-wheelers till FY28 and increased the allocation for the segment by nearly ₹1,000 crore, according to a notification issued late Monday. Read ahead to know more.
The government has extended subsidies for electric two-wheelers under the PM E-Drive scheme until FY28, raising the allocation for the segment by nearly ₹1,000 crore, according to a notification issued late Monday.
The extension comes months after reports first emerged that the government was considering prolonging the benefits, which had originally been set to lapse in FY26, and follows a Rajya Sabha standing committee's call for the heavy industries ministry to expedite the move.
Higher Allocation And Expanded Coverage
According to the notification, the allocation for electric two-wheeler incentives has been raised to ₹2,767 crore from ₹1,772 crore till FY28, while the number of vehicles eligible for subsidy support has increased to 4.57 million from over 2.4 million. The scheme's overall outlay has also been enhanced to ₹11,900 crore from ₹10,900 crore.
The subsidy rate will continue at ₹2,500 per kWh of battery capacity, capped at ₹5,000 per vehicle, a change from the earlier structure that offered ₹5,000 per kWh in the first year and ₹2,500 per kWh in the second. The deadline for claiming the subsidy has now been pushed to 31 December 2027.
Rising Adoption And Reduced Petrol Dependence
The extension is expected to offer greater policy clarity to manufacturers as the electric two-wheeler segment continues to grow. According to Vahan data, electric two-wheeler sales rose to 1.46 million in FY26 from 252,787 in FY22, even as petrol two-wheeler sales declined to around 11 million from 13.2 million over the same period.
The shift towards electric two-wheelers could also help ease India's reliance on petrol, given that two-wheelers account for about two-thirds of the 42.6 million tonnes of petrol sold in the country in FY26, as per data from the Petroleum Planning and Analysis Cell.
The scheme, which also covers three-wheelers, e-buses, e-trucks and electric or hybrid ambulances, had already completed its subsidy support for L5 category electric three-wheelers, while support for two-wheelers, L3 category e-rickshaws, ambulances and e-trucks will now continue until FY28.
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