To promote the sale of electric vehicles, the central government has announced a new subsidy scheme called PM E-Drive. This scheme has been introduced after the FAME II subsidy scheme ended in March this year. However, the subsidy under this scheme is limited to electric two-wheelers, three-wheelers, and electric buses, while electric and hybrid cars are excluded. This scheme will remain in effect until March 2025.
Under PM E-Drive, a total of ₹10,900 crore has been allocated for 2,480,000 electric two-wheelers, 316,000 three-wheelers, and 14,028 electric buses. This will be implemented as the third phase of the FAME scheme. Under FAME II, over 1.6 million electric vehicles have already benefited from the subsidy.
Increase in Charging Station Availability
Additionally, ₹500 crore each has been allocated for electric trucks and hybrid ambulances to encourage EV adoption in critical service sectors and the commercial vehicle segment. Incentives for trucks will only be provided to those with a scrapping certificate from a vehicle scrapping center approved by the Ministry of Road Transport.
Subsidy of ₹3,679 crore, 88,000 charging stations, ₹14,000 crore boost for EVs
The PM E-Drive scheme also aims to develop a robust charging infrastructure. To boost charging infrastructure, ₹2,000 crore has been allocated for installing 22,100 fast chargers for electric four-wheelers, 1,800 fast chargers for e-buses, and 48,400 fast chargers for e-two-wheelers and three-wheelers.
In addition to the subsidy, the government has announced a ₹3,435 crore payment security mechanism fund (PSMF) for 38,000 electric buses. This will reduce the financial risk for bus operators and promote the electrification of the public transport network.
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No Subsidy for Electric Car Buyers
Private electric car buyers are excluded from the subsidy under the PM E-Drive scheme. This is seen as a major setback for India’s largest electric car manufacturer, Tata Motors, and other electric passenger car makers.
Union Minister for Heavy Industries, H.D. Kumaraswamy, said the goal is to achieve 10% EV penetration in the two-wheeler segment and 15% in the three-wheeler segment by March 2026. The scheme also aims to accelerate EV adoption and establish the necessary charging infrastructure to promote clean transportation. When asked why private electric cars are excluded from the scheme, he explained that the GST on private electric cars is already at the lower slab of 5%.