Cabinet approves PM E-Drive scheme with outlay of INR 10,900 Crore
In a significant move towards promoting electric mobility, the Indian government has launched the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-Drive) scheme. This initiative, managed by the Ministry of Heavy Industries, marks a crucial step forward from the expiring FAME scheme and aims to accelerate the adoption of electric vehicles (EVs) across various segments.
Policy Timeline:
Budgetary Outlay and Coverage:
With a budget of INR 10,900 crore over next two years, this government scheme focuses on electric two-wheelers (E2Ws), three-wheelers (E3Ws), trucks, buses, ambulances, and charging infrastructure. It supports the installation of 72,300 EV charging stations across the country, aiming to create a more robust EV ecosystem.
Source: PIB, JMK Research
Key Highlights of PM E-Drive Scheme
Reduced Subsidies for Electric Two-Wheelers (E2Ws):
The subsidy for Electric two-wheelers (E2Ws)—which dominate the EV market in India—has been drastically reduced. Under FAME II, over INR 5,000 crore was allocated for E2W subsidies. In PM E-Drive, this has been reduced to INR 3,679 crore, which now also includes subsidies for electric three-wheelers (E3Ws). There is still no provision for electric passenger vehicles (E-Cars) under the PM E-Drive subsidy scheme. While FAME II included incentives for commercial electric cars, these have also been removed in the PM E-Drive scheme.
Inclusion of Electric Trucks
One of the most significant inclusions in PM E-Drive is electric trucks, which have been added to the subsidy scheme for the first time. Truck manufacturers have long demanded support, citing the high costs of transitioning to electric heavy vehicles. This addition reflects the government’s recognition of trucks as a “major cause of pollution.” INR 500 crore has been allocated for electric truck subsidies.
E-Ambulances: A New Focus
The scheme allocates INR 500 crore for the deployment of e-ambulances, a new initiative by the Government of India to promote the use of electric ambulances for more comfortable patient transport. Performance and safety standards for e-ambulances will be developed in consultation with the Ministry of Health and Family Welfare (MoHFW), the Ministry of Road Transport and Highways (MoRTH), and other relevant stakeholders.
Aadhaar-Based E-Voucher System for Subsidies
After various issues and allegations of subsidy misappropriation during FAME II, the government has tightened the process for claiming subsidies under PM E-Drive. Now, every buyer must get an Aadhaar-authenticated e-voucher when purchasing an eligible vehicle. This e-voucher is then submitted to the dealer and uploaded to the PM E-Drive portal. This digital system will be crucial for Original Equipment Manufacturers (OEMs) to receive subsidy reimbursements, ensuring greater transparency.
Focus on Public Transport and Charging Infrastructure:
The PM E-Drive scheme is not solely focused on individual vehicle ownership; it also emphasizes the need for enhanced public transport systems and charging infrastructure
Electric Buses
A significant portion of the PM E-Drive budget—INR 4,391 crore—has been earmarked for the procurement of 14,028 electric buses by state transport undertakings (STUs) and public transport agencies. This aligns with the government’s broader goal of reducing urban pollution by transitioning public buses to electric power.
Charging Infrastructure
The scheme also allocates INR 2,000 crore to expanding the EV charging network. By supporting the installation of 72,300 fast chargers for two-wheelers, three-wheelers, four-wheelers, and buses, the government aims to reduce one of the biggest barriers to EV adoption: limited charging availability. This investment targets urban centers and highways, benefiting both individual EV owners and public transport fleets.
Summary:
Evolution from FAME II to PM E-Drive:
Source: MHI, PIB, JMK Research
The PM E-Drive initiative represents a more targeted approach to India’s electric vehicle revolution, balancing the need for public transport, charging infrastructure, and transparent subsidy mechanisms. The inclusion of electric trucks and e-ambulances demonstrates the government’s commitment to addressing pollution in sectors that have traditionally been overlooked. By fostering public transport and focusing on charging infrastructure, India is laying the groundwork for a more sustainable and widespread adoption of electric vehicles, all while aligning its policies with long-term environmental and urbanization goals.