The Ministry of Heavy Industries (MHI) has extended subsidy support for electric two-wheelers and rickshaws under the PM E-DRIVE programme, while adjusting funding allocations and vehicle targets within the scheme.
The PM E-DRIVE initiative — short for Prime Minister’s Electric Drive Revolution in Innovative Vehicle Enhancement — was launched in September 2024 to support the adoption of low-emission transport technologies across India, including electric trucks, buses, ambulances and charging infrastructure. Electric passenger cars are not covered under the programme.
Under the revised timelines, subsidies for electric two-wheelers will now be available until July 31, 2026, extending the original March 2026 deadline. Support for electric rickshaws and carts has been extended further, with applications open until March 31, 2028.
The overall programme budget remains unchanged at 109 billion rupees (around one billion euros), with the extension intended to ensure full utilisation of allocated funds. However, internal budget allocations have been revised, including a significant reduction in funding for e-rickshaws—from 19.2 billion rupees to 500 million rupees—while other segments such as L5 three-wheelers have been given increased flexibility to respond to stronger demand.
For electric two-wheelers, the government provides a subsidy of 2,500 rupees per kilowatt-hour (kWh) of battery capacity, capped at 5,000 rupees per vehicle. To qualify, vehicles must have an ex-factory price not exceeding 150,000 rupees. The subsidy applies to vehicles sold between April 1, 2025 and July 31, 2026, subject to available budget, with a maximum of 2,479,120 units eligible under the scheme.
In the e-rickshaw and e-cart segment, the subsidy rate remains 2,500 rupees per kWh, but the cap per vehicle is higher at 12,500 rupees. Eligible vehicles must have an ex-factory price of no more than 250,000 rupees, with a total quota of 39,034 units.
Across both categories, an additional condition applies: the subsidy cannot exceed 15% of the vehicle’s ex-factory price. If this percentage results in a lower amount than the fixed subsidy cap, the lower amount will be disbursed.
The adjustments come as India continues to promote electric mobility adoption, particularly in high-volume segments such as two- and three-wheelers, which play a central role in urban and last-mile transport.
