Quick Highlights:
- Rs 1,500 crore allocated for PM E-Drive Scheme in Union Budget FY27.
- EV subsidies for two- and three-wheelers end March 31, 2026.
- Incentives for buses, trucks, ambulances and charging infra continue till March 2028.
- Over 21.24 lakh EVs already incentivised under the scheme.
Budget FY27: PM E-Drive Gets Rs 1,500 Cr Allocation
The Union Budget 2026–27 (FY27) has allocated Rs 1,500 crore for the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-Drive) scheme, reaffirming the government’s commitment to electric mobility, even as near-term subsidies for mass-market EVs approach their sunset period.
The scheme, administered by the Ministry of Heavy Industries, has been a major driver of EV demand in India, particularly in the two- and three-wheeler segments.
Personally, I see this allocation as a signal of transition rather than retreat. The government appears to be shifting from broad-based consumer subsidies to long-term infrastructure and commercial EV support.
Allocation Trends: From Ambition to Rationalisation
Budget documents show notable fluctuations in funding for the PM E-Drive scheme:
- FY25 allocation: Rs 993 crore
- FY26 Budget Estimate: Rs 4,000 crore
- FY26 Revised Estimate: Rs 1,300 crore
- FY27 Budget Estimate: Rs 1,500 crore
The moderated FY27 allocation suggests a more calibrated approach as some vehicle-category targets have already been achieved and others are nearing completion.
About the PM E-Drive Scheme
Launched on October 1, 2024, the Rs 10,900-crore PM E-Drive scheme replaced the earlier FAME programme. Its core objective is to lower upfront EV costs through direct demand incentives while simultaneously expanding charging infrastructure.
Category-wise Outlay
- Rs 3,679 crore for electric two- and three-wheelers
- Rs 4,391 crore for electric buses
- Rs 500 crore each for electric trucks and electric ambulances
- Rs 2,000 crore for public EV charging infrastructure
Subsidies Timeline: What Ends and What Continues
While the overall scheme has been extended till March 2028, there’s a critical distinction in subsidy timelines:
- Electric two-wheelers and three-wheelers: Subsidies end March 31, 2026
- Electric buses, trucks, ambulances & charging infra: Incentives continue till March 2028
This phased withdrawal aligns with the government’s view that smaller EV segments are nearing cost competitiveness, while heavy and public transport EVs still need policy support.
Progress So Far: Targets and Achievements
As of December 30, a total of 21.24 lakh electric vehicles have been incentivised under PM E-Drive.
Segment-wise Performance:
- Electric two-wheelers: 18.40 lakh units subsidised against a target of 24.79 lakh
- E-3W (L5 category): Target achieved early; subsidies closed after 2.88 lakh units on December 26, 2025
- E-rickshaws and e-carts: 5,267 units incentivised against a target of 39,034
The early closure of L5 subsidies highlights strong adoption momentum, though slower uptake in e-rickshaws indicates uneven segment performance.
Charging Infrastructure: The Next Growth Lever
The operational guidelines for public EV charging infrastructure were released only recently, and incentive disbursals are yet to begin.
Under the Rs 2,000-crore allocation, the scheme targets:
- 22,100 fast chargers for four-wheelers
- 1,800 chargers for electric buses
- 48,400 chargers for two- and three-wheelers
In my view, this is where the real long-term impact will come from. Subsidies may taper off, but a dense and reliable charging network will determine whether EV adoption sustains itself beyond policy support.
What This Means for India’s EV Market
The FY27 allocation suggests a strategic pivot. The government is gradually stepping back from high-volume consumer subsidies while doubling down on infrastructure and public transport electrification. For OEMs and fleet operators, the message is clear: scale, efficiency, and charging access will matter more than incentives going forward.
Frequently Asked Questions — FAQs
Q. What is the PM E-Drive Scheme?
- The PM E-Drive Scheme is a government programme aimed at accelerating electric vehicle adoption through purchase subsidies and charging infrastructure development.
Q. How much has been allocated for PM E-Drive in Budget FY27?
- The Union Budget FY27 has allocated Rs 1,500 crore for the scheme.
Q. When will EV subsidies for two-wheelers end?
- Subsidies for electric two-wheelers and three-wheelers will be phased out by March 31, 2026.
Q. Which EV segments will continue to get incentives till 2028?
- Electric buses, trucks, ambulances, and public charging infrastructure will continue to receive incentives until March 2028.
Q. How many EVs have benefited from the scheme so far?
- As of December 30, 21.24 lakh electric vehicles have been incentivised under PM E-Drive.
Q. What is the total outlay of the PM E-Drive Scheme?
- The total scheme outlay stands at Rs 10,900 crore.
