Centre extends e2w subsidies under PM E-DRIVE till March 2028, boosts outlay to Rs 11,900 crore

New Delhi: The Centre has extended subsidies for electric two-wheelers till March 2028, bolstering efforts to accelerate electrification of the automobile industry.

An incentive of up to ₹5,000 per vehicle will continue to be offered under the PM E-DRIVE scheme, according to a gazette notification.

Officials said the government provisioned an additional ₹1,000 crore for electric two-wheeler (e2w) subsidies, boosting the total PM E-DRIVE outlay to ₹11,900 crore.


ET was the first to report July 22 that e2w incentives under PM E-DRIVE will be extended beyond July 31.

Also read: Electric two wheeler subsidies extended till March 2028

India recorded sales of 2.7 million e2ws, surpassing the 2.5 million target set when the programme was rolled out in September 2024. Another 297,000 large electric-three-wheelers were sold, ahead of the target of 289,000.

The Centre initially earmarked ₹1,772 crore for subsidising e2w manufactured under the PM E-DRIVE scheme. This has now been enhanced to ₹2,767 crore.

"Subsidies for e2w may need to continue till they reach 10% of total sales," a senior official told ET, adding electric three-wheelers no longer require the incentives.

Also read: PM E-DRIVE scheme to run till Mar 31, 2028; electric two-wheeler incentive capped at Rs 5,000

According to official estimates, ₹1,259.91 crore was spent for subsidising e2w till March-end. Another ₹907 crore was earmarked for electric three-wheelers (e3w), of which ₹737.35 crore was spent. The incentives offer was earlier extended beyond the March 31, 2026, deadline.

Electric buses got the largest share of subsidy allocation under PM E-DRIVE with ₹4,391 crore earmarked for them in the scheme.