The government's decision to extend incentives for electric two-wheelers under the PM E-DRIVE scheme is likely to draw attention from investors tracking India's EV sector. This will boost EV adoption while supporting the country's domestic manufacturing ecosystem.
The Ministry of Heavy Industries, in a notification dated August 10, 2026, said the PM E-DRIVE scheme will now continue until March 31, 2028. The scheme has a total outlay of Rs 11,900 crore and focuses on faster EV adoption, charging infrastructure and the development of India's EV manufacturing ecosystem.
Electric Two-Wheeler Subsidy Structure
Under the revised provisions, registered electric two-wheelers will continue to receive purchase incentives for the period from April 1, 2025, to March 31, 2028. The incentive has been set at Rs 2,500 per kilowatt-hour, subject to a maximum of Rs 5,000 per vehicle.
The maximum ex-factory price of an eligible electric two-wheeler has been fixed at Rs 1.5 lakh. The scheme provides support for a maximum of 45,79,120 electric two-wheelers, with total funding support from the Ministry of Heavy Industries pegged at Rs 2,767 crore.
For comparison, the incentive applicable during FY2024-25 was Rs 5,000 per kWh, capped at Rs 10,000 per vehicle. The government has also clarified that the per-kWh incentive could be reviewed depending on reductions in vehicle costs and notified periodically. The incentive will remain limited to the specified amount or 15% of the vehicle's ex-factory price, whichever is lower.
Also read: PM E-Drive EV Subsidy Scheme Comes Into Effect In India Amid Global EV Slowdown
PM E-DRIVE Outlay Capped At Rs 11,900 Crore
The government has reiterated that PM E-DRIVE is a fund-limited scheme. Total payouts will remain capped at the overall scheme outlay of Rs 11,900 crore. If funds for the scheme or any sub-component are exhausted before March 31, 2028, the relevant component may be closed, and no further claims will be entertained.
The notification also states that March 31, 2028, is the terminal date for all scheme segments, while the last date for submitting claims to the Ministry of Heavy Industries or the Project Management Agency will be December 31, 2027.
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