If you are planning to buy an electric scooter or another electric two-wheeler, there is an important update you should know.
The Ministry of Heavy Industries has reduced the subsidy available for eligible electric two-wheelers under the PM E-DRIVE scheme.
The revised incentive applies for the period from April 1, 2025, to March 31, 2028.
Under the new rules, buyers can get an incentive of ₹2,500 per kWh, subject to a maximum benefit of ₹5,000 per electric two-wheeler.
This is significantly lower than the incentive available during FY2024-25.
How Much Was the Earlier Electric Vehicle Subsidy?
During FY2024-25, eligible electric two-wheelers received an incentive of ₹5,000 per kWh, with the maximum benefit capped at ₹10,000 per vehicle.
The revised rules have effectively reduced both the per-kWh incentive and the maximum subsidy.
The new provisions were notified by the Ministry of Heavy Industries on August 10, 2026.
However, the subsidy is not available for every electric two-wheeler.
To qualify, the vehicle must have a maximum ex-factory price of ₹1.5 lakh.
Government Sets Aside ₹2,767 Crore for Electric Two-Wheelers
The government has allocated ₹2,767 crore to support registered electric two-wheelers under the PM E-DRIVE scheme.
This amount is expected to cover a maximum of around 45.79 lakh electric two-wheelers.
Another ₹55 crore has been allocated for administrative expenses.
The PM E-DRIVE scheme has a total financial outlay of ₹11,900 crore.
However, there is an important condition.
If the funds allocated to the scheme or any particular component are exhausted before the scheme’s end date, that component can be closed before March 31, 2028.
PM E-DRIVE Scheme: Important Dates
The scheme’s overall terminal date remains March 31, 2028.
However, beneficiaries cannot wait until the final day to submit their claims.
Claims for incentives must be submitted to the Ministry of Heavy Industries or the Project Management Agency by December 31, 2027.
After March 31, 2028, no payments will be made by the Ministry or the Project Management Agency under the scheme.
Electric Three-Wheeler Target Already Completed
The incentive component for registered electric three-wheelers in the L5 category has already been closed.
According to the notification, this component reached its prescribed target and was closed on December 26, 2025.
This shows that individual components of the PM E-DRIVE scheme can end before the overall scheme deadline if their allocated targets or funds are exhausted.
PM E-DRIVE Subsidy at a Glance
New incentive: ₹2,500 per kWh
Maximum benefit: ₹5,000 per electric two-wheeler
Earlier FY2024-25 incentive: ₹5,000 per kWh, capped at ₹10,000
Eligible vehicle price: Up to ₹1.5 lakh ex-factory
Two-wheeler fund allocation: ₹2,767 crore
Expected coverage: Up to 45.79 lakh vehicles
Scheme end date: March 31, 2028
Last date for claims: December 31, 2027
The subsidy cut means buyers of eligible electric two-wheelers may now receive less government support than before.
Anyone planning to purchase an electric scooter should check the applicable incentive before making a purchase, as benefits can also depend on the availability of funds under the scheme.
