PM E-DRIVE: the ₹10,900 crore scheme replacing FAME — what's in, what's out
India's new EV subsidy framework: ₹10,900 crore for e-2Ws, e-3Ws, buses, ambulances, trucks and charging — but no cars.
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The Union Cabinet approved and notified PM E-DRIVE (PM Electric Drive Revolution in Innovative Vehicle Enhancement) — a ₹10,900 crore, two-year scheme (Oct 1, 2024 – Mar 31, 2026) that replaces the nine-year-old FAME program.
What's supported
| Segment | Units | Outlay | |---|---|---| | e-2Ws | 24.79 lakh | ₹1,772 Cr | | e-3Ws (incl. rickshaws) | 3.16 lakh | ₹907 Cr | | e-buses | 14,028 | ₹4,391 Cr | | e-ambulances | 3,811 | ₹500 Cr | | e-trucks | 5,643 | ₹500 Cr | | Charging infrastructure | — | ₹2,000 Cr | | Testing agencies | — | ₹780 Cr | | Total | 28.3 lakh | ₹10,900 Cr |
Key mechanics
- e-2W/e-3W incentive: ₹5,000/kWh in FY25 → ₹2,500/kWh in FY26, capped at 15% of ex-factory price
- e-buses: ₹10,000/kWh via competitive bidding through CESL (OPEX/GCC model)
- e-vouchers: Aadhaar-authenticated vouchers generated at purchase, signed by dealer, uploaded to portal
- Advanced batteries only — basic-battery EVs excluded
No subsidies for electric or hybrid cars — a deliberate choice. The scheme targets commercial adoption (2W/3W, buses, trucks) and public transport, where the diesel-to-electric swap is biggest.
Why it matters
PM E-DRIVE (with the separate ₹3,435 crore e-bus PSM scheme for 38,000 buses) is the demand-side backbone of India's EV push through FY26. The declining incentive curve (₹5,000 → ₹2,500/kWh) signals the subsidy taper toward market maturity.
Subsidies halve in year two — anyone planning an EV fleet purchase should model both the incentive and its phase-out.Advertisement
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