PM Electric-Drive scheme to halve e-2W subsidy from April

The ₹10,900-crore PM Electric-Drive Scheme, which comes into effect from today, halves the subsidy for electric two-wheelers from April 2025. In the ongoing fiscal, a demand incentive of ₹5,000 per kWh (kilowatt hour) will be available for buyers in the form of an upfront reduced purchase price of electric vehicles. This subsidy will be capped at ₹10,000 per vehicle. However, this incentive will halve to ₹2,500 per kWh with the start of the financial year 2025-26 and subsidy will be capped at ₹5,000 per vehicle. The incentive for e-2Ws be further capped at 15% of ex-factory price.

Incentives for electric three-wheelers in the L5 category will also be halved from ₹5,000 per kWh in the ongoing financial year to ₹2,500 per kWh next fiscal. The overall incentive limit per vehicle will also go down from ₹50,000 this fiscal to ₹25,000 in FY26.

The PM E-Drive scheme will be implemented from October 1, 2024 to March 31, 2026, for faster adoption of electric vehicles (EVs), setting up of charging infrastructure and upgradation of testing agencies.

This will also subsume the outlay of the e Electric Mobility Promotion Scheme 2024 (EMPS-2024) which was implemented for the period from April 1, 2024 to September 30, 2024.

Apart from demand incentives for e-2W, e-3W, e-ambulances, e-trucks and other new emerging EV categories, the scheme grants for creation of capital assets: e-buses, establishment of network of charging stations and upgradation of testing agencies.

The efforts of the central government to promote e-mobility need supplemental support from State Governments. States need to offer bouquet of fiscal and non-fiscal incentives. Some such incentives may include waiver, concessional road tax, exemption from permit, waiver or concessional toll tax, waiver or concessional parking fees, concessional registration charges, etc., says the ministry of heavy industries.

The PM E-Drive scheme includes subsidies worth ₹3,679 crore to incentivise electric two-wheelers (e-2Ws), three-wheelers (e-3Ws), e-ambulances, e-trucks and other emerging EVs. The scheme aims to support 24.79 lakh e-2Ws, 3.16 lakh e-3Ws, and 14,028 e-buses.

The scheme allocates ₹500 crore for the deployment of e-ambulances. A sum of ₹4,391 crore has been provided for procurement of 14,028 e-buses by public transport agencies. ₹500 crore has been allocated for incentivising e-trucks. The scheme aims to address range anxiety of EV buyers by promoting the installation of electric vehicle public charging stations (EVPCS) with an outlay of ₹2,000 crore.

The ministry is introducing e-vouchers for EV buyers to avail demand incentives under the scheme. At the time of purchase of the EV, the scheme portal will generate an Aadhaar authenticated e-Voucher for the buyer. A link to download the e-voucher will be sent to the registered mobile number of the buyer. This e-voucher will be signed by the buyer and submitted to the dealer to avail demand incentives under the scheme.