India Gets A New EV Subsidy Scheme That Skips Electric, Hybrid Cars

The government has approved for two years a new Rs 10,900 crore EV subsidy scheme, in yet another attempt to step up adoption of electric mobility in the world's third largest automotive industry.

Called PM Electric Drive Revolution in Innovative Vehicle Enhancement, or PM E-Drive, the EV subsidy scheme will support 24.79 lakh electric two-wheelers, 3.16 lakh electric three-wheelers and 14,028 electric buses with a total outlay of Rs 3,679 crore, according to a press statement released on Wednesday.

A special emphasis has been laid on building charging infrastructure—a key bottleneck in large-scale adoption of electric vehicles in India. The scheme proposes the installation of 22,100 fast chargers for electric cars, 1800 fast chargers for electric buses and 48,400 fast chargers for electric two- and three-wheelers. The outlay is set at Rs 2,000 crore.

"There is no provision for electric (or hybrid) cars under the new scheme," Union Minister Ashwini Vaishnaw said while announcing the cabinet decisions taken during a meeting on Wednesday.

A sum of Rs 4,391 crore has been provided for the procurement of 14,028 electric buses by public transport agencies. A study will be conducted to gauge demand for electric buses in cities with a population of more than 40 lakh, including Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Surat, Bangalore, Pune and Hyderabad. Intercity and Interstate electric buses will be supported in consultation with states.

An additional Rs 500 crore has been allocated for hybrid ambulances.

Separately, the Union Ministry of Heavy Industries is introducing e-vouchers for EV buyers to avail demand incentives under the scheme.

At the time of purchase of the EV, the scheme portal will generate an Aadhaar authenticated e-voucher for the buyer. A link to download the e-voucher shall be sent to the registered mobile number of the buyer.

The PM E-Drive follows the second phase of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles, which expired on March 31, 2024, after a five-year run. During those five years, the FAME-II scheme impacted 13,21,800 EVs with a total outlay of Rs 11,500 crore. Only 2,700 charging points were installed under the FAME-II scheme.

The scheme was replaced by the Rs 500 crore Electric Mobility Promotion Scheme 2024, which is set to run its course on Sept. 31.

The first iteration of the FAME scheme came into effect in April 2015 for a duration of two years but was extended through March 31, 2019. Out of the total outlay of Rs 795 crore, only Rs 529 crore was disbursed, covering 2.78 lakh EVs and 465 electric buses.

On Sept. 2, NDTV Profit reported that the central government is set to announce the FAME-III EV subsidy scheme by mid-September with an outlay comparable to that of the FAME-II. Now, the scheme has been rechristened, albeit with a smaller outlay and no benefits for electric cars.