PM E-Drive Scheme: Govt reinstates subsidies for electric three-wheelers

NEW DELHI : The Ministry of Heavy Industries (MHI) on November 19 reinstated subsidies for electric three-wheelers under the PM E-Drive Scheme. The move comes as the annual subsidy allocation for electric three-wheelers for FY25 had been exhausted and, as a result, the government had temporarily stopped disbursing incentives for electric three-wheelers.

The MHI has now sanctioned more funds for electric three-wheelers from the overall outlay of the PM E Drive scheme. Last month, ­­­­MHI announced that the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme, approved by Cabinet recently with a financial outlay of ₹10,900 crore, came into effect from October 1, 2024, and will remain in force until March 31, 2026.

Its primary aim is to accelerate the adoption of electric vehicles (EVs), establish charging infrastructure, and build a robust EV manufacturing ecosystem in the country.

For the three-wheelers category, the initiative is designed to incentivise around 320,000 electric three-wheelers (e-3Ws), covering registered e-rickshaws/e-carts or L5 category vehicles. Only those e-3Ws with advanced battery technology are qualified for the demand incentive. The scheme is solely applicable to e-3Ws used for commercial purposes, the MHI said in a statement on October 9.

Since the annual cap for the number of subsidised e-three wheelers under the PM E-Drive scheme has almost been reached for this fiscal year, the Centre had decided not to extend the subsidies beyond the cap for FY25. However, the subsidies have now been reinstated.

PM E-Drive Scheme was launched on October 1 with a budget outlay of ₹10,900 crore for two years for vehicle categories including e2Ws, e3Ws, e-ambulances, e-trucks e-buses, and PM-eBus Sewa Payment Security Mechanism to accelerate the adoption of EVs across the country.

Under the Scheme, the subsidies for e2Ws were fixed based on battery power at ₹5,000 per kilowatt hour (kWh), but the overall incentive will not exceed ₹10,000 in the first year. In the second year, it will be halved by ₹2,500 per kilowatt hour, and the overall benefit will not exceed ₹5,000.

Similarly, the e-rickshaw subsidy of ₹25,000 in the first year was fixed and ₹12,500 in the second year. For the L5 category of e-3W, it was fixed at ₹50,000 in the first year and reduced to ₹25,000 in the second year.