PM E-Drive Subsidy for Electric Two-Wheelers Extended to 2028

PM E-Drive Subsidy Extended for Electric Two-Wheelers

The government has extended demand incentives for electric two-wheelers under the PM E-Drive scheme until March 31, 2028, while increasing the segment allocation by Rs 1,000 crore, according to a notification issued by the Ministry of Heavy Industries. The revised allocation for electric two-wheelers is now Rs 2,767 crore, compared with Rs 1,772 crore earlier. The government has also increased the maximum number of electric two-wheelers eligible for support to 45,79,120. The extension provides manufacturers and buyers in India with a longer subsidy window, after support for the segment had previously been extended only until July 31, 2026.

PM E-Drive Subsidy Rate and Eligibility

Under the revised scheme, electric two-wheelers registered from April 1, 2025, to March 31, 2028, will receive an incentive of Rs 2,500 per kilowatt-hour of battery capacity, subject to a maximum of Rs 5,000 per vehicle. The maximum ex-factory price for an electric two-wheeler eligible for the incentive remains Rs 1.5 lakh. The incentive is limited to the specified amount or 15 per cent of the vehicle's ex-factory price, whichever is lower. This means eligible buyers continue to receive support, but the subsidy remains substantially below the Rs 5,000 per kWh rate, capped at Rs 10,000 per vehicle, that applied during financial year 2024-25.

PM E-Drive Outlay, Timeline and Funding Limits

The latest amendment raises the overall PM E-Drive scheme outlay to Rs 11,900 crore. The scheme is being implemented from April 1, 2024, through March 31, 2028, with objectives covering electric vehicle adoption, charging infrastructure and development of the electric vehicle manufacturing ecosystem in India. The government originally launched the scheme in October 2024 with an outlay of Rs 10,900 crore and an initial end date of March 31, 2026. The latest changes extend the electric two-wheeler subsidy window through March 2028 while increasing the dedicated segment allocation and eligible vehicle limit.

Claim Deadline and PM E-Drive Fund Availability

The latest notification also establishes December 31, 2027, as the final date for submitting claims to the Ministry of Heavy Industries or the implementing agency. No payments will be made after March 31, 2028. The scheme remains subject to its overall funding limit, meaning total payouts cannot exceed the revised Rs 11,900-crore outlay. If funds allocated to the scheme or any individual component are exhausted before March 31, 2028, the relevant component can be closed and additional claims will not be entertained. The funding provision therefore extends the support period without guaranteeing incentives until the final date for every eligible vehicle.

Electric Two-Wheeler Sales Growth

The extension comes as electric two-wheeler adoption has increased significantly in recent years. According to Vahan data cited in the original announcement, electric two-wheeler sales reached 1.46 million in financial year 2026, compared with 252,787 units in financial year 2022. The increase highlights the expansion of the electric two-wheeler market alongside changing government support levels. The subsidy was reduced from April 1, 2025, as the government moved to scale back the level of financial support for electric vehicles. The latest extension therefore provides a longer incentive horizon while retaining the lower subsidy rate and existing price eligibility conditions.

Other Vehicles Covered Under PM E-Drive

The PM E-Drive scheme covers electric two-wheelers, three-wheelers, buses, trucks and electric and hybrid ambulances, in addition to supporting charging infrastructure. Electric three-wheelers in the L5 category had already reached their sales target, resulting in closure of their subsidy after December 2025. The broader scheme is intended to promote electric vehicle adoption and strengthen the supporting ecosystem rather than provide identical incentives across every vehicle category. The latest amendment specifically restores electric two-wheelers to the subsidy window through March 2028, giving the segment continued policy support within the overall scheme limits in India.

Frequently Asked Questions

How long will PM E-Drive incentives for electric two-wheelers continue?
The revised scheme provides demand incentives for eligible electric two-wheelers registered through March 31, 2028, extending support beyond the earlier July 31, 2026 deadline. The extension applies within the revised allocation and overall scheme funding limits. Eligible vehicles must continue to satisfy the applicable price and incentive conditions. The government has also specified December 31, 2027, as the final date for submitting claims, while payments cannot be made after March 31, 2028. Incentives can still end earlier if the allocated funds are exhausted.

How much subsidy can an eligible electric two-wheeler receive?
Eligible electric two-wheelers registered between April 1, 2025, and March 31, 2028, can receive Rs 2,500 per kilowatt-hour of battery capacity, subject to a maximum of Rs 5,000 per vehicle. The incentive is also capped at 15 per cent of the vehicle's ex-factory price, with the lower applicable amount determining the final support. The maximum eligible ex-factory price remains Rs 1.5 lakh. The revised rate is lower than the Rs 5,000 per kWh incentive, capped at Rs 10,000 per vehicle, available during financial year 2024-25.