PM E-Drive Scheme

Context (LM): PM Electric Drive scheme has been extended by two years due to unused funds and will now continue until 2027-28 or until its full allocated corpus is exhausted.

About PM E-Drive Scheme

PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-Drive), launched in 2024, is a ₹10,900 crore Central Sector Scheme for 2024–2026 under the Ministry of Heavy Industries (MoHI) to promote clean, sustainable urban transport.
Key Objectives:
- Expedite EV adoption across 2W, 3W, 4W, e-buses, trucks & ambulances.
- Reduce upfront EV cost for users and support EV ecosystem growth.
- Nationwide public EV charging infrastructure & improve air quality by reducing transport emissions.
- Promote domestic manufacturing and technological advancement in EVs.

Builds On FAME-I (2015), FAME-II (2019), Electric Mobility Promotion Scheme 2024 (EMPS-2024).
Demand incentives worth ₹3,679 crore will be provided for consumers (buyers/end users) for purchasing e-2Ws, e-3Ws, e-buses, e-trucks and e-ambulances via Aadhaar-authenticated e-vouchers, capped at 15% of ex-factory price.
Subsidy rates for e-2W and e-3W are set at ₹5,000/kWh in FY 2024–25 and ₹2,500/kWh in FY 2025–26, directly reimbursed to original equipment manufacturer (OEM).
14,028 electric buses will be deployed in 9 major cities by 2026 through State/ city transport undertakings (STUs) under Gross Cost Contract/OPEX model, with vehicles priced below ₹2 crore eligible.
Charging infrastructure support of ₹2,000 crore will enable installation of public charging stations (EVPCS) across 9 high EV penetration cities and key highways, following MoP’s 2024 guidelines.
Electric ambulance deployment (₹500 crore) will include electric, plug-in hybrid, and strong hybrid types, aligned with performance standards set with MoHFW and MoRTH.
Incentives for e-trucks (₹500 crore) require valid scrapping certificates from MoRTH-authorised facilities to promote clean freight transport.
Capital support will fund EV public charging stations, procurement of e-buses and upgradation of vehicle testing infrastructure to ensure quality and safety compliance.

Gross Cost Contract (GCC) model: The government pays a fixed amount to the operator to run and maintain electric buses, regardless of fare revenue collected.
OPEX model: Focuses on covering the operating expenses of running electric buses, ensuring service sustainability without relying solely on ticket sales.

Implemented under the PM E-Drive initiative. E-trucks were previously excluded from the FAME scheme.
It is a Central Sector Scheme by the Ministry of Heavy Industries.
One-fifth of the financial incentive outlay has been allocated to vehicles registered in Delhi.

FAME Scheme: Launched in 2015 by the Ministry of Heavy Industries, the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) Scheme aims to promote EV adoption through demand incentives, mainly for electric 2-wheelers, 3-wheelers, 4-wheelers, and buses.

Expand EV Coverage: To promote electric vehicles in underserved segments like medium and heavy-duty trucks.
Reduce Emissions: To lower greenhouse gas emissions from road-based goods transport.
Boost E-Truck Demand: To create a stable domestic market for electric trucks in India.
Lower Logistics Costs: To reduce operational costs by promoting energy-efficient e-trucks.

Target Beneficiaries: The scheme targets electric trucks based on gross vehicle weight (GVW) in categories N2 (3.5–12 tonnes) and N3 (12–55 tonnes).
Incentive Disbursal Mode: The financial incentive offers a price reduction of up to ₹9.6 lakh per vehicle during purchase.
Eligibility: E-trucks need advanced batteries and the disposal of old diesel trucks.

PLI Scheme Compatibility: Incentives under PM E-DRIVE are in addition to those under PLI-Auto and PLI-ACC (Advanced Chemistry Cell).
PM-eBus Sewa & PSM: Linked Payment Security Mechanism ensures smoother procurement and operation of e-buses by Public Transport Authorities.
Technology Platform for Electric Mobility (TPEM): Facilitates R&D and innovation in the EV ecosystem under the Ministry of Science & Technology.
State Incentives Encouraged: Road tax exemptions, toll waivers, parking fee rebates, etc.
GST Reduction: GST on EVs lowered from 12% to 5% to boost affordability.