New Delhi, Aug 11: The government has extended the PM E-DRIVE scheme for electric two-wheelers till March 2028 and increased the allocation for the segment by nearly Rs 1,000 crore, giving the fast-growing EV industry greater policy certainty and continued support for consumers.
PM E-DRIVE, or the PM Electric Drive Revolution in Innovative Vehicle Enhancement, is a government scheme aimed at accelerating electric vehicle adoption, supporting domestic EV manufacturing and developing the country’s electric mobility ecosystem.
Under the latest decision, the allocation for electric two-wheeler incentives has been increased to Rs 2,767 crore from Rs 1,772 crore, while the number of electric two-wheelers eligible for incentives has been raised to 4.57 million from more than 2.4 million.
The overall outlay of the PM E-DRIVE scheme has also been increased to Rs 11,900 crore from Rs 10,900 crore.
The main reason behind the extension is the continued growth of India’s electric two-wheeler market and the need to provide manufacturers and consumers with greater policy visibility as the original scheme approached its end.
Under the extended programme, the incentive for eligible electric two-wheelers will remain at Rs 2,500 per kWh of battery capacity, capped at Rs 5,000 per vehicle. The last date for claiming the incentive has been extended to December 31, 2027.
The move is expected to support demand for electric scooters and motorcycles by helping reduce their upfront purchase cost. It also gives manufacturers more confidence to plan investments, expand production and introduce new electric models.
Electric two-wheeler sales have risen sharply in recent years. Vahan data show sales reaching around 1.46 million units in FY26, compared with 252,787 units in FY22.
The shift towards electric two-wheelers could also help reduce petrol consumption, as two-wheelers account for a significant share of petrol demand in India. Greater EV adoption could therefore support the country’s efforts to reduce its dependence on imported crude oil.
The extended support is also expected to benefit the wider EV ecosystem, including battery and component manufacturers, startups, MSMEs, charging infrastructure providers and other businesses linked to electric mobility.
The PM E-DRIVE scheme covers electric two-wheelers, three-wheelers, e-buses, e-trucks and electric and hybrid ambulances. The latest extension is aimed at maintaining the momentum of India’s electric mobility transition while providing a more predictable policy environment for the industry.
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