The PM E-DRIVE program has been launched by the government, allocated a budget of ₹10,900 crore, and will run from October 2024 to March 2026. This scheme is designed to boost the uptake of electric vehicles by providing subsidies and funding for both EVs and their charging setups. Additionally, state governments are urged to supplement these efforts with their own fiscal and non-fiscal incentives.
The central government announced the PM E-DRIVE scheme on Monday through a gazette notification. The scheme, with a financial commitment of INR 10,900 crore, is set to be implemented from October 1, 2024, to March 31, 2026. Its primary goals are to promote the rapid adoption of electric vehicles (EVs), develop the EV manufacturing ecosystem, and establish necessary charging infrastructure across the country.
Additionally, the ongoing Electric Mobility Promotion Scheme (EMPS) for 2024 will be integrated into this new initiative. According to the notification, the existing commitments for vehicles and funds under EMPS 2024 will now fall under the PM E-DRIVE Scheme, which offers subsidies for electric two-wheelers, three-wheelers, e-ambulances, e-trucks, and other emerging EV categories. The scheme also includes grants for building capital assets such as e-buses, expanding the network of charging stations, and enhancing testing agencies.
However, the success of the Central Government’s e-mobility efforts depends on additional support from state governments. The notification encourages states to provide a variety of fiscal and non-fiscal incentives, such as exemptions from permits, reduced road tax, toll tax, parking fees, registration charges, or their complete waiver.
Overall, INR 8,070 crore in incentives has been designated for EVs, with buses receiving the largest portion at INR 4,391 crore, followed by two-wheelers at INR 1,772 crore.
Under the same PM E-DRIVE, a Phased Manufacturing Programme (PMP) has been introduced to foster the localisation of EV components. Starting December 1, 2024, EV chargers must have a minimum of 50% domestic value addition to qualify for scheme benefits.
Furthermore, starting in 2025-26, financial support for electric two-wheelers will be reduced to INR 5,000 per vehicle. For electric three-wheelers, the subsidy will be limited to INR 25,000 per vehicle. The PM E-DRIVE aims to subsidize locally manufactured vehicles, addressing past issues where subsidies were misused by companies selling largely imported vehicles. The new scheme includes stringent measures to prevent such abuses.
