Key Points
- The Ministry of Heavy Industries (MHI) has officially extended demand incentives for electric two-wheelers under the PM E-DRIVE scheme until March 31, 2028 (FY28).
- The government expanded the overall scheme budget by ₹1,000 crore to ₹11,900 crore, raising the electric two-wheeler allocation to ₹2,767 crore.
- The total volume of subsidized electric two-wheelers has been increased from 2.47 million to 4.57 million units across eligible OEMs.
- Incentives remain set at ₹2,500 per kWh of battery capacity, capped at ₹5,000 per vehicle for ex-factory prices up to ₹1.5 lakh.
- Following the notification, electric two-wheeler equities—including Ola Electric, Ather Energy, TVS Motor, and Hero MotoCorp—gained up to 5% on August 11, 2026.
| Detail | Information |
|---|---|
| Policy Initiative | PM E-DRIVE (PM Electric Drive Revolution) Scheme |
| Nodal Ministry | Ministry of Heavy Industries (MHI) |
| Extended Terminal Date | March 31, 2028 (FY28) |
| Total Scheme Outlay | ₹11,900 crore (Increased from ₹10,900 crore) |
| e2W Segment Outlay | ₹2,767 crore (Increased from ₹1,772 crore) |
| Subsidized Vehicle Target | 45,79,120 Registered Electric Two-Wheelers |
In a major boost for India's clean-tech mobility transition, the Ministry of Heavy Industries (MHI) has officially extended buyer subsidies for electric two-wheelers (e-2Ws) under the flagship PM E-DRIVE scheme through March 31, 2028 (FY28).
The policy extension eliminates a major regulatory deadline that was slated to conclude in FY26, providing long-term pricing visibility to original equipment manufacturers (OEMs), component suppliers, and retail buyers across the world's second-largest two-wheeler market.
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📊 Explore Stock Market on VittarthiEnhanced Budget Allocation & Volume Target
Under the gazette notification dated August 10, 2026, the central government raised the overall budget outlay for the PM E-DRIVE scheme by ₹1,000 crore to ₹11,900 crore. The allocation dedicated exclusively to electric two-wheelers was expanded from ₹1,772 crore to ₹2,767 crore.
The higher funding allocation scales the total volume of incentivized electric two-wheelers from 24.79 lakh units to 45.79 lakh units, catering to surging retail adoption where electric two-wheelers already account for nearly 8% of total domestic registration volumes.
Subsidy Rate Structure & Eligibility Caps
The demand incentive structure for electric two-wheelers remains standardized for the extended period from April 1, 2025, to March 31, 2028:
| Parameter | PM E-DRIVE Subsidy Specification |
|---|---|
| Battery-Linked Incentive Rate | ₹2,500 per kWh of battery capacity |
| Maximum Incentive Cap | ₹5,000 per electric two-wheeler |
| Ex-Factory Price Ceiling | ₹1.50 lakh maximum ex-factory price for eligibility |
| Incentive Mechanism | Upfront price discount via Aadhaar-authenticated e-vouchers |
Industry Implications for Electric Two-Wheeler Manufacturers
Strategic Significance for Auto Sector Growth & EV Equities
The extension of PM E-DRIVE through FY28 carries major strategic advantages for India's automotive sector:
- Uninterrupted OEM Scaling: Extending subsidy coverage to 4.57 million units provides multi-year demand visibility for major OEMs like TVS Motor, Hero MotoCorp, Bajaj Auto, Ather Energy, and Ola Electric.
- Reducing Crude Import Dependence: Two-wheelers consume nearly two-thirds of India's 42.6 million tonnes of annual petrol sales. Sustained electrification directly reduces the national crude oil import bill.
Frequently Asked Questions
What is the new deadline for electric two-wheeler subsidies under PM E-DRIVE?
The Ministry of Heavy Industries has extended electric two-wheeler demand incentives until March 31, 2028 (FY28).
How much subsidy can a buyer get on an electric scooter under PM E-DRIVE?
Incentives are set at ₹2,500 per kWh of battery capacity, capped at a maximum of ₹5,000 per electric two-wheeler with an ex-factory price up to ₹1.5 lakh.
How much additional funding was allocated for electric two-wheelers?
The government increased the total PM E-DRIVE scheme outlay by ₹1,000 crore to ₹11,900 crore, raising the electric two-wheeler allocation from ₹1,772 crore to ₹2,767 crore.
Risk Alert
Investments in automotive and electric vehicle equities are subject to raw material price volatility, technology adoption risks, and policy changes. Subsidy caps and localization requirements apply. Conduct thorough independent research before making investment decisions.