The Indian government has launched the PM E-Drive scheme with an allocation of ₹10,900 crore to accelerate the adoption of electric vehicles (EVs) and support environmental sustainability. The scheme, which is available until March 31, 2026, aims to boost electric mobility through key initiatives such as financial incentives, infrastructure development, and domestic manufacturing support.
One of the primary objectives of the scheme is to promote the faster adoption of EVs by making them more affordable through demand incentives. These incentives help reduce the upfront cost of electric two-wheelers (e-2W) and three-wheelers (e-3W), encouraging consumers to transition from conventional fuel-based vehicles. Additionally, the scheme prioritizes the expansion of charging infrastructure to enhance convenience and build confidence among EV users.
The PM E-Drive scheme also focuses on strengthening the domestic EV manufacturing ecosystem. By supporting local production and reducing import dependence, the initiative aims to ensure long-term sustainability in the sector. Public transport and commercial EVs receive special attention, as their adoption on a large scale is expected to significantly reduce carbon emissions and lower the country’s reliance on fossil fuels.
Under the scheme, financial incentives are provided to both consumers and manufacturers. Consumers benefit from demand incentives that lower the purchase cost of EVs, making them more accessible to a broader audience. Manufacturers gain from increased demand, boosting production and sales. The Phased Manufacturing Programme (PMP) supports the localization of EV components, further strengthening India’s EV industry.
The scheme offers financial support to encourage EV adoption across different regions. In the financial year 2024-25, demand incentives of ₹5,000 per kWh are available for e-2W and e-3W categories, while in 2025-26, the incentive is set at ₹2,500 per kWh. These incentives are capped at 15% of the ex-factory price, ensuring affordability while promoting industry growth.
A major component of the PM E-Drive scheme is the allocation of ₹4,391 crore for the deployment of 14,028 electric buses (e-buses). The government has emphasized the scrapping of old State Transport Undertaking (STU) buses before procuring new e-buses. Cities and states that follow this scrapping policy through authorized Registered Vehicle Scrapping Facilities (RVSFs) will be given preference for grants under the scheme.
To ensure the smooth execution of the initiative, an inter-ministerial Project Implementation and Sanctioning Committee (PISC) has been established. Headed by the Secretary of Heavy Industries, this empowered committee is responsible for monitoring, sanctioning, and implementing the PM E-Drive scheme. The PISC will also address any challenges or obstacles that arise during implementation.
The scheme is expected to contribute significantly to job creation and industry expansion. The PMP mandates a progressive increase in domestic manufacturing of EV components, reducing reliance on imports while boosting local production. Additionally, investment in charging infrastructure is anticipated to generate employment opportunities in installation, maintenance, and operational roles.
Another key feature of the initiative is the promotion of local manufacturing for EV chargers. The scheme mandates a minimum of 50% domestic value addition (DVA) in the production of EV chargers, encouraging local component manufacturers to participate in the growing EV sector.
By facilitating the growth of the electric vehicle industry, the PM E-Drive scheme aims to position India as a global leader in sustainable transportation. Through financial incentives, infrastructure development, and domestic manufacturing support, the initiative is expected to drive the country towards a cleaner and more energy-efficient future.
