PM E-Drive subsidy for electric two-wheelers extended to March 2028

The government has extended demand incentives for electric two-wheelers under the PM E-Drive scheme to March 31, 2028, through a notification issued by the Ministry of Heavy Industries. The move gives electric two-wheeler manufacturers a longer subsidy runway, following an earlier extension only up to July 31, 2026. 

1. PM E-Drive subsidy for electric two-wheelers extended to March 31, 2028
2. Segment allocation raised by Rs 1,000 crore to Rs 2,767 crore
3. Per-vehicle subsidy rate unchanged at Rs 2,500 per kWh, capped at Rs 5,000

PM E-Drive extension details

The scheme remains fund-limited – subsidies could end before March 2028 if funds are exhausted

The total allocation for the electric two-wheeler segment under the scheme has also been increased by Rs 1,000 crore to Rs 2,767 crore, while the overall PM E-Drive scheme outlay rises to Rs 11,900 crore. 

The subsidy rate for electric two-wheelers registered between April 1, 2025, and March 31, 2028, remains at Rs 2,500 per kWh of battery capacity, subject to a maximum of Rs 5,000 per vehicle. This is lower than the Rs 5,000 per kWh (capped at Rs 10,000 per vehicle) offered in FY25, a reduction the government made as part of a planned tapering of EV support. The maximum ex-factory price of an eligible electric two-wheeler also remains unchanged at Rs 1.5 lakh. The incentive is capped at the specified amount or 15 percent of the ex-factory price, whichever is lower. The number of electric two-wheelers eligible for support under the scheme has been raised to 45,79,120 units.

That said, the scheme is fund-limited. If the Rs 11,900 crore total outlay or the allocation for any specific component is exhausted before March 31, 2028, that component can be closed and no further claims will be entertained. December 31, 2027, has been set as the last date for submitting claims.

The extension comes at a time when electric two-wheeler sales have grown sharply in India. According to Vahan data, electric two-wheeler sales reached 1.46 million units in FY26 – up significantly from 2,52,787 units in FY22 – and the segment crossed 2 lakh monthly sales for the first time in July 2026. The continuation of the subsidy is expected to sustain momentum in the segment, particularly in the sub-Rs 1.5 lakh price category where the majority of mainstream electric scooters are sold.