According to a Ministry of Heavy Industries official gazette statement, the new Rs 10,900-crore PM E-Drive initiative, which promotes charging infrastructure and offers demand incentives for electric vehicles, will go into force tomorrow, October 1. The program is set to expire on March 31, 2026. The notification states that starting in April 2025, subsidies for electric two- and three-wheelers would be cut in half.
The Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME) II initiative, which was worth Rs 11,500 crore but ran out of money in March, was replaced by the PM E-Drive scheme. Under the PM E-Drive is the interim Rs 778-crore Electric Mobility Promotion Scheme (EMPS), which is in effect till September 30.
While the government has set aside Rs 7,171 crore to promote the adoption of electric buses, upgrade public charging infrastructure, and upgrade testing infrastructure, it also intends to provide demand incentives worth Rs 3,679 crore for the purchase of electric two-wheelers, three-wheelers, ambulances, and trucks.
Compared to the five-year FAME II project, the new scheme is more extensive, has a larger budget, and places more of an emphasis on charging infrastructure and public transportation. The program suggests that the government intends to progressively stop providing subsidies to consumers who purchase electric vehicles.
The government introduced the Phased Manufacturing Program (PMP), which mandates that manufacturers of electric vehicles procure and build a sizable portion of their components locally, in order to guarantee localization. In order for the vehicles to qualify for the subsidies under the FAME scheme, OEMs were required to adhere to PMP localization standards.