India reboots EV subsidy policy, excludes cars

India’s top decision-making ministerial body this week approved a ₹10,900 crore (about $1.3 billion) scheme to promote electric vehicles (EV) over a two-year period in the country.

Dubbed PM E-DRIVE, or PM Electric Drive Revolution In Innovative Vehicle Enhancement, the scheme will replace the existing Faster Adoption and Manufacturing of Electric Vehicles, or FAME, program that ran for nine years until March.

The new scheme subsidizes electric two-wheelers, three-wheelers and buses, apart from hybrid ambulances and electric trucks, but excludes electric and hybrid cars.

It aims to support 2.5 million e-two-wheelers, 316,000 e-three-wheelers, and 14,028 e-buses while providing ₹3,679 crore in subsidies and incentives to boost demand for a wider range of emerging EVs, including e-ambulances and e-trucks.

While the scheme allocates ₹500 crore for the deployment of e-ambulances, ₹4,391 crore has been set aside for the procurement of 14,028 e-buses by state transport agencies. State-run green energy venture CESL will aggregate demand in nine cities with more than 4 million population for e-buses: Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Surat, Bangalore, Pune, and Hyderabad.

The scheme allocates ₹500 crore to incentivize the deployment of e-trucks, a major step toward reducing air pollution, with incentives available only to those who submit a scrapping certificate from government-recognized facilities.

The scheme also proposes to install 22,100 fast chargers for e-4-wheelers, 1,800 fast chargers for e-buses, and 48,400 fast chargers for e-2W/3Ws with an outlay of ₹2,000 crore.

“With PM E-DRIVE doubling the charging infrastructure budgetary outlay to ₹2,000 crore, up from the FAME II scheme, we can expect significant improvements in the current ratio of one public charging station for every 178 electric vehicles,” Pradeep Karuturi, lead, Centre for Clean Mobility at OMI Foundation, said.

“Introducing new vehicle categories such as e-trucks and e-ambulances, and electrification of buses cornering over 40% of the allocation are positive developments,” he added.

“PM E-DRIVE will help accelerate the adoption of EVs across the country, making clean and green transportation more accessible,” Shailesh Chandra, president of automobile manufacturers lobby Siam, said.

“We believe this scheme will not only enhance the growth of the EV ecosystem but also strengthen India’s leadership in the global movement towards environmental sustainability,” Chandra added.

Joy e-bike maker Wardwizard Innovations and Mobility Ltd’s chairman and managing director, Yatin Gupte, said the focus on e-2-wheelers and e-3-wheelers is critical to last-mile connectivity and sustainable urban transport.

“Allocating ₹2,000 crore to bolster charging infrastructure, including fast charging stations for 2Ws and 3Ws, will help alleviate customer anxiety and foster confidence in EV adoption,” Gupte said.

The measures will accelerate the growth of EV market and open up avenues for innovation, particularly with incentives for electric commercial vehicles, trucks, and buses, he added.