Govt revises PM E-DRIVE scheme; sets new deadlines and incentives for electric two & three wheelers

In a notification published in the Gazette on March 27, 2026, the Government of India has amended the PM e-DRIVE scheme, which offers incentives for electric two- and three-wheelers. The amended scheme offers a fund-limitation model with a total outlay of Rs 10,900 crore and is effective until March 31, 2028, or until funds are exhausted, whichever is earlier.

Ministry of Heavy Industries notifies amendments in PM E-DRIVE scheme

The Ministry of Heavy Industries said in the notification, "This is a fund limited Scheme. Total payout under the Scheme shall be limited to the scheme outlay of Rs10,900 crore. In case the funds for the Scheme or its relevant sub-components are exhausted prior to the terminal date of the Scheme i.e. 31st March 2028, then the Scheme or its relevant sub-components will be closed accordingly i.e. no further claims will be entertained."

E-2 Wheelers

For electric two-wheelers, the updated scheme sets a deadline of 31 July 2026 for availing of incentives. The support has been revised as follows:

• Rs 5,000 per kWh (capped at Rs 10,000 per vehicle) until FY25
• Rs 2,500 per kWh (capped at Rs 5,000 per vehicle) from April 2025 onwards

Eligible vehicles must have a maximum ex-factory price of Rs 1.5 lakh. The scheme targets support for approximately 24.79 lakh electric two-wheelers.

E-3 Wheelers (e-rickshaw, e-cart)

For electric three-wheelers, including e-rickshaws and e-carts, the incentive period extends until 31 March 2028. The revised incentives are:

• Rs 5,000 per kWh (maximum Rs 25,000 per vehicle) in the initial phase
• Rs 2,500 per kWh (maximum Rs 12,500 per vehicle) in the later phase

Eligible e-3 wheelers should have a maximum ex-factory price of Rs 2.5 lakh, with the scheme aiming to support around 39,034 vehicles.

"The terminal date for registered e-2W shall be 31st July 2026 and the terminal date for registered e-3W (e-rickshaws & e-carts) shall be 31st March 2028. Further, as the target for sub-component registered e-3W (L5) has already been achieved, this segment was closed on 26th December 2025, as already advised...," the notification read.

The notification also noted that the proposed amount of incentive per kWh is, however, subject to review as per the reduction in vehicle cost and would be notified accordingly from time to time. The incentive shall be limited to as specified above or 15 per cent of ex-factory price of e-2W/ e-3W, whichever is lower.

The amendments are expected to continue encouraging the adoption of electric mobility while ensuring that support remains within the allocated budget.