PM E-DRIVE Scheme Extended to March 2028: Revised Outlay & Guidelines

The Ministry of Heavy Industries (MHI) has extended purchase incentives for electric two-wheelers under the PM E-DRIVE scheme through March 31, 2028, restoring central subsidy support after the previous incentive window lapsed on July 31. Announced via a Gazette notification dated August 10, 2026, the amendment raises the scheme's total outlay by ₹1,000 crore to ₹11,900 crore and nearly doubles the number of two-wheelers eligible for support, from 24.79 lakh to 45.79 lakh vehicles. The change follows weeks of pressure from EV makers facing long delivery backlogs.

What Happened

On August 10, 2026, MHI notified S.O. 4424(E) in the Gazette of India, amending the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme for the third time since its September 2024 launch.

The amendment closes a gap that opened on July 31, 2026, when the scheme's incentive window for registered electric two-wheelers (e-2Ws) expired under an earlier notification dated March 27, 2026. New e-2W buyers went without the central subsidy for roughly ten days before this order restored and extended it.

Four parts of the scheme are revised: the overall duration and outlay, the e-2W incentive table, the administrative budget breakup, and the rules governing scheme closure and final claims.

What Changed, at a Glance

Why It Matters

For buyers, the amendment prevents an unplanned price increase. Because dealers apply the incentive as an upfront invoice discount rather than a rebate claimed later, its absence would have added ₹5,000 to ₹10,000 to the on-road price of an entry-level electric scooter, depending on battery size.

For manufacturers, the timing matters more than the amount. Industry estimates for the first quarter of FY27 put monthly e-2W demand at 240,000 to 250,000 units against registrations of only 160,000 to 170,000, a gap that had pushed waiting periods to around 45 days at TVS Motor and roughly 60 days at Ather Energy. Company executives had been asking the ministry for continued demand support to help absorb that backlog while new production capacity comes online.

The Revised e-2W Incentive Structure

The per-vehicle incentive rate itself is not new; the step-down from FY26 onward was written into the original 2024 notification. What changes here is how long the lower rate stays available and how many vehicles it can cover.

Two conditions apply throughout: the vehicle's ex-factory price cannot exceed ₹1.5 lakh, and the incentive is capped at 15% of that price, whichever figure is lower.

Where the Rest of the ₹11,900 Crore Goes

This amendment touches only the e-2W segment and the scheme's administrative provisions. The remainder of PM E-DRIVE's outlay, committed since the scheme's 2024 launch, continues under earlier notifications:

• Electric three-wheelers: The heavier L5 category closed on December 26, 2025, after reaching its sales target ahead of schedule. Registered e-rickshaws and e-carts remain covered through March 2028.
• Electric buses: ₹4,391 crore is earmarked for state transport undertakings to procure 14,028 e-buses across nine cities with populations above 40 lakh, including Delhi, Mumbai, Bengaluru, and Hyderabad.
• Electric ambulances: ₹500 crore supports e-ambulance deployment. MHI expanded this component in June 2026 to cover 3,811 units through FY28.
• Electric trucks: A separate July 2025 notification set aside ₹500 crore for roughly 5,600 e-trucks in the N2 and N3 weight categories, contingent on buyers submitting a certificate for scrapping an equivalent diesel truck.
• Charging infrastructure: ₹2,000 crore is allocated to Electric Vehicle Public Charging Stations, targeting about 72,300 fast chargers nationwide, split between two-wheelers/three-wheelers, four-wheelers, and buses.
• Testing infrastructure: ₹780 crore supports upgrades to vehicle testing agencies.

How to Claim the Subsidy

PM E-DRIVE incentives reach buyers through an Aadhaar-linked e-voucher system rather than a rebate claimed after purchase.

• At the dealership, the dealer initiates Aadhaar e-KYC using face authentication through the PM E-DRIVE portal.
• The portal generates a unique e-voucher and sends a download link to the buyer's registered mobile number.
• Both buyer and dealer sign the e-voucher, and the dealer uploads it to the portal.
• The dealer deducts the incentive from the invoice immediately, so the buyer pays the discounted price at purchase.
• The manufacturer separately claims reimbursement from MHI using the signed voucher.

Timeline: How PM E-DRIVE Has Evolved

What This Means for Buyers and Dealers

Anyone buying a qualifying e-2W going forward can expect the ₹2,500-per-kWh incentive, capped at ₹5,000, to apply through March 2028, subject to funds lasting that long. At the dealership, confirm the vehicle's ex-factory price is within the ₹1.5 lakh threshold and complete Aadhaar e-KYC to generate the voucher.

Because the scheme is fund-limited rather than strictly time-limited, money could run out before March 2028 if adoption keeps accelerating, closing the relevant sub-component early. The notification states plainly that no further claims are entertained once a segment's funds are exhausted, regardless of the published end date.

Also Read: Top 5 Best EV Scooters in India (2026)

Industry Context

PM E-DRIVE replaced the nine-year-old FAME scheme in 2024 and folded in the short-lived Electric Mobility Promotion Scheme (EMPS-2024), which ran from April to September that year. As of February 2026, MHI had reported more than 28 lakh EVs sold under the scheme, including over 20 lakh e-2Ws and close to 3 lakh e-3Ws.

Separately, automakers' body SIAM has asked MHI for more time on an unrelated requirement: localising traction motors and motor controllers for e-buses and e-trucks. In a July 22, 2026 letter, SIAM sought a deferral from September 1, 2026 to April 1, 2027, citing continued disruption to rare-earth magnet supplies following export restrictions from China. That request concerns manufacturing localisation norms, not the e-2W demand incentive addressed in this notification, and MHI has not responded publicly as of this writing.

What's Expected Next

Two things are worth watching. Whether MHI acts on SIAM's localisation-timeline request before the current September 1, 2026 deadline, and how quickly the expanded e-2W funding gets absorbed given how fast registrations have been running in 2026. If demand keeps outpacing the funding pace, the allocation could face renewed pressure before 2028.

The scheme's hard stop remains March 31, 2028, after which MHI will not process any payments. The last date to submit a claim for any component is December 31, 2027.

Conclusion

This amendment does not change India's broader EV subsidy roadmap so much as it keeps the e-2W segment, the scheme's highest-volume category, aligned with the rest of PM E-DRIVE through 2028. For buyers, the subsidy that briefly disappeared is back, at the same rate that applied before July 31. For manufacturers, it buys time to work through order backlogs without an abrupt end to demand-side support.