The PM E-Drive Scheme has been extended until 2028, while the subsidy for scooters will conclude in 2026

The Union government has declared a two-year extension of the PM E-Drive electric vehicle subsidy scheme, pushing the deadline from March 2026 to March 31, 2028. This extension will apply solely to larger categories of electric vehicles like buses, trucks and ambulances. Subsidies for two and three-wheeler vehicles will terminate as initially scheduled in March 2026.

Budget Initiative around ₹10,900 crore

Lengthy production cycles and procurement deadlines are said to be the main reasons to support the heavy vehicle, says the Ministry of Heavy Industries. Moreover public transit operators and commercial fleet owners will benefit the most from this initiative, says industry experts.

The initiative’s current budget allocation is approximately around ₹10,900 crore, with no additional funds provided. Officials have warned that if demand increases dramatically, the approved amount could run out before the revised date. 

Customers buying electric scooters, rickshaws, and other three-wheeled vehicles will cease to receive central subsidies, starting from April 1, 2026. Industry experts state that this could impact more than 90% of the electric vehicle market, as these smaller vehicles constitute the majority of sales in India.

Follow-up to the FAME programme

Manufacturers, especially of trucks & buses, have welcomed the extension; however, leaders from the two and three-wheeler manufacturing sector have voiced concerns that the abrupt elimination of subsidies may hinder the adoption of EVs in smaller cities and towns. The PM E-Drive scheme, introduced as a follow-up to the FAME programme, seeks to accelerate the shift towards cleaner transportation by reducing the initial cost of electric vehicles.