PM E-Drive Scheme- The Ministry of Heavy Industries (MHI) of the Government of India has decided to extend the PM E-Drive scheme for two more years. Under this, subsidy for electric trucks, electric buses, electric ambulances and public charging infrastructure will continue till March 31, 2028. At the same time, the provision of subsidy for electric two-wheelers (e-2W), electric rickshaws, electric three-wheelers (e-3W) and electric carts will end on March 31, 2026.

This information has been given in a government notification issued on 7 August 2025, which clarifies that the scheme is fund-limited and the total budget will be limited to Rs 10,900 crore. The notification states, “The terminal date of the scheme for registered electric two-wheelers, rickshaws, carts and three-wheelers has been fixed as March 31, 2026.”

Grant Thornton India’s partner for auto and EV sector, Saketh Mehra, said that this extension was necessary to provide relief to the slow-growing segments. He said that projects of public charging infrastructure take a lot of time to implement as approvals from state governments and various ministries are required for this.

Sakeet Mehra also mentioned the delay in the production of electric trucks due to localization requirements under the Phased Manufacturing Program (PMP). Apart from this, the Payment Security Mechanism (PSM) has not been fully implemented in the case of electric buses yet, due to which it was also necessary to move the plan forward. Talking about e-ambulances, no such hybrid or electric models are available in the market in India yet, due to which the development and procurement process is slow.

Explaining the rationale for the extension, Saurabh Agarwal, Automotive Tax Leader, EY India, said, “Adoption in the e-truck and e-ambulance space has been slow so far. The government has extended the scheme period to ensure that subsidies are provided to this segment. The process of localisation and adoption is moving slowly, so there was a need to give the industry a clear timeline to boost investments.”

Introduction and Financial Disbursement of PM E-Drive Scheme

PM E-Drive Scheme was launched in October 2024 with a total amount of Rs 10,900 crore. It aims to promote the production and use of electric vehicles in India. The following targets have been set under the scheme:

24.8 lakh electric two-wheelers (e-2W)
3.15 lakh electric three-wheelers (e-3W)
5,643 electric trucks
14,028 electric buses
88,500 public charging stations
As a financial incentive, a total demand incentive of Rs 3,679 crore is being given under the scheme, which includes

Rs 1,772 crore on electric two-wheeler purchase
Rs 907 crore on electric three-wheelers
Rs 500 crore on electric ambulances
Rs 500 crore on electric trucks
Apart from this, an amount of Rs 7,171 crore has been allocated for electric buses (Rs 4,391 crore), public charging infrastructure (Rs 2,000 crore) and testing facilities (Rs 780 crore).

Importance of the scheme

The expansion of this scheme will boost the electric vehicle sector in India, especially in areas where growth has been slow. The development of public charging networks and the production of large electric vehicles such as trucks, buses and ambulances have been slow due to administrative challenges. This expansion will help overcome these challenges and make the scheme a success.