Archive · 12 Aug 2026
PM E-DRIVE: Govt Caps EV Two-Wheeler Incentive at Rs 5,000
The government of India has a program called PM E-DRIVE that helps people buy electric scooters and bikes by giving them some money back.
Electric vehicles are good for the environment because they don't need petrol.
The government has decided to keep this program running until March 31, 2028.
But it will now give less money to buyers than before.
Earlier, buyers could get up to Rs 10,000, but now the most they can get is Rs 5,000.
The money is given based on battery size, at Rs 2,500 for each unit of battery power.
Only scooters and bikes that cost less than Rs 1.5 lakh before taxes are eligible.
The government has set aside Rs 2,767 crore, which should help about 45,79,120 vehicles.
If the money runs out before 2028, that part of the program will stop early.
The whole program has a budget of Rs 11,900 crore.
The Ministry of Heavy Industries has extended the PM E-DRIVE scheme to March 31, 2028, with an overall outlay of Rs 11,900 crore.
The purchase incentive for registered electric two-wheelers has been cut to Rs 2,500 per kWh, capped at Rs 5,000 per vehicle, down from Rs 5,000 per kWh and a Rs 10,000 cap in FY2024-25.
The incentive applies only to electric two-wheelers with a maximum ex-factory price of Rs 1.5 lakh, and is capped at the lower of the specified amount or 15 per cent of the ex-factory price.
The government has earmarked Rs 2,767 crore for e-2W incentives, expected to cover up to 45,79,120 vehicles, plus Rs 55 crore for administrative expenses.
The fund-limited scheme may close components early if funds are exhausted; claims must be submitted by December 31, 2027, and the e-3W (L5) component was closed on December 26, 2025.
- Who
- The Ministry of Heavy Industries of the Government of India
- What
- Extended the PM E-DRIVE scheme to March 31, 2028, and cut the electric two-wheeler purchase incentive to Rs 2,500 per kWh, capped at Rs 5,000 per vehicle
- When
- Revised provisions notified on August 10, 2026, covering the period from April 1, 2025, to March 31, 2028
- Where
- India
- Why
- To accelerate EV adoption and strengthen domestic electric vehicle manufacturing within a fund-limited budget
- Scheme
- PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE)
- New e-2W incentive
- Rs 2,500 per kWh, capped at Rs 5,000 per vehicle
- Previous incentive (FY2024-25)
- Rs 5,000 per kWh, capped at Rs 10,000 per vehicle
- Maximum ex-factory price
- Rs 1.5 lakh
- Incentive upper limit
- Lower of specified amount or 15 per cent of ex-factory price
- E-2W fund allocation
- Rs 2,767 crore for incentives; Rs 55 crore for administrative expenses
- Vehicles covered
- Up to 45,79,120 electric two-wheelers
- Overall outlay and timeline
- Rs 11,900 crore; terminal date March 31, 2028; claims due by December 31, 2027
