Govt Revives Subsidies for Electric Three-Wheelers Under PM E-Drive Scheme

The Ministry of Heavy Industries (MHI) announced the reinstatement of subsidies for electric three-wheelers under the PM E-Drive Scheme on November 19. This decision comes after the initial annual subsidy allocation for electric three-wheelers for FY25 was exhausted, temporarily halting incentives for the segment. To address the shortfall, the MHI sanctioned additional funds from the overall financial outlay of the PM E-Drive Scheme.

Overview of the PM E-Drive Scheme

The PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme was launched to accelerate the adoption of electric vehicles (EVs) in India. Approved by the Cabinet with a budget of ₹10,900 crore, the scheme became effective on October 1, 2024, and will continue until March 31, 2026.

The initiative has three primary objectives:

• Encouraging the use of EVs in both commercial and private sectors.

• Establishing a nationwide charging infrastructure network.

• Developing a robust EV manufacturing ecosystem to support long-term growth.

Focus on Electric Three-Wheelers

Under the scheme, specific provisions are made for electric three-wheelers (e-3Ws). The goal is to provide subsidies for approximately 320,000 e-3Ws, including registered e-rickshaws and L5 category vehicles. Eligible vehicles must feature advanced battery technology and be used exclusively for commercial purposes.

The scheme aims to promote e-3Ws as a sustainable solution for urban and rural mobility, reducing the dependence on fossil fuels and lowering emissions.

Temporary Suspension of Subsidies for FY25

Earlier in the fiscal year, the annual cap for subsidised e-3Ws was nearly reached. As a result, the government temporarily stopped disbursing further subsidies for FY25. This move was intended to adhere to the pre-defined limits under the PM E-Drive scheme.

Reinstatement of Subsidies

Acknowledging the growing demand and the importance of sustaining momentum in the EV segment, the government allocated additional funds for e-3W subsidies. This step ensures the continuation of benefits for commercial e-3W users, supporting both manufacturers and consumers.

Vision for EV Adoption in India

The reinstatement of subsidies underlines the government’s commitment to fostering sustainable mobility solutions. The PM E-Drive Scheme is part of India’s broader strategy to reduce carbon emissions, promote clean energy, and achieve ambitious climate goals. By incentivising advanced battery technology and supporting EV infrastructure development, the initiative aims to position India as a global leader in EV innovation.

Looking Ahead

With the renewed funding, the government hopes to sustain the growth of the electric three-wheeler market. This move is expected to encourage more stakeholders to adopt electric mobility solutions, ensuring a greener and more sustainable future for India’s transport sector.

This proactive measure reflects India’s dedication to addressing environmental challenges and meeting its clean energy commitments.