MHI Extends PM E-DRIVE Electric 2-Whleer Incentives till July 2026
The Ministry of Heavy Industries has amended the PM E-DRIVE scheme, extending e-2W incentives to July 31, 2026, while retaining the INR 10,900 crore outlay and capping support for 24.79 lakh e-2Ws and 39,034 e-3Ws.
March 31, 2026. By Mrinmoy Dey
The scheme remains a fund-limited programme. The government has clarified that once the allocated funds are exhausted – whether before or by the terminal date of March 31, 2028 – the scheme or its relevant components will be closed, and no further claims will be entertained.
For e-2Ws, incentives have been reduced from INR 5,000/ kWh (capped at INR 10,000 per vehicle) in FY25 to INR 2,500/kWh (capped at INR 5,000 per vehicle) for the period from April 2025 to July 2026. The scheme aims to support up to 24,79,120 e-2Ws, with a total fund allocation of INR 1,772 crore, subject to a maximum ex-factory price threshold of INR 1.5 lakh.
The MHI notification further clarified that support for electric three-wheelers (e-3Ws), including e-rickshaws and e-carts, will continue until March 31, 2028. Notably, the L5 category of e-3Ws has already been discontinued from December 26, 2025, after achieving its target capacity.
For e-3Ws (e-rickshaws and e-carts), incentives have been rationalised from INR 5,000/kWh (capped at INR 25,000 per vehicle) to INR 2,500/kWh (capped at INR 12,500 per vehicle). The segment will support up to 39,034 vehicles, with a total outlay of INR 50 crore and an ex-factory price cap of INR 2.5 lakh.
Importantly, the notification reiterates that incentives will remain linked to cost trajectories, with the per kWh subsidy subject to periodic review. Additionally, the total incentive per vehicle will be limited to either the prescribed cap or 15 percent of the ex-factory price – whichever is lower – ensuring fiscal prudence.
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