Electric Two-Wheeler Rates To Go Down By Up To Rs 10,000 After New EV Subsidy Scheme
The subsidy for electric two-wheelers is Rs 5,000 per kWh for up to Rs 10,000 per unit in the first year, Minister for Heavy Industries HD Kumaraswamy said.
The new electric vehicle subsidy scheme, approved by the Union Cabinet on Sept. 11, will bring electric two-wheeler rates down by up to Rs 10,000 per unit, said HD Kumaraswamy, the union minister for heavy industries.
The subsidy for electric two-wheelers is Rs 5,000 per kWh for up to Rs 10,000 per unit in the first year, and Rs 2,500 per kWh for up to Rs 10,000 per unit in the second year, Kumaraswamy said on Thursday.
The subsidy for electric three-wheelers is Rs 50,000/kWh in the first year, and Rs 25,000/kWh in the second year, he said.
There has been no decision taken yet on the amount of subsidy for electric buses, the minister clarified.
The scheme, called PM Electric Drive Revolution in Innovative Vehicle Enhancement, or PM E-Drive, is yet another attempt to step up adoption of electric mobility in the world's third largest automotive industry.
With an overall outlay of Rs 10,900 crore spread across two years, the scheme will support 24.79 lakh electric two-wheelers, 3.16 lakh electric three-wheelers and 14,028 electric buses. However, it excludes electric cars and hybrid vehicles.
The aim is to achieve 10% EV penetration in the two-wheeler space and 15% EV penetration in the three-wheeler space by the end of this scheme, Kumaraswamy said.
Explaining the rationale behind the exclusion of passenger EVs in PM E-Drive, the minister said electric cars are already being taxed at a lower GST slab of 5%. "Plus, there are benefits under the Auto PLI scheme," he said.
Breakup Of Outlay
Nearly 40% of the scheme's overall outlay, or Rs 4,391 crore, has been earmarked for electric buses, Kumaraswamy noted.
This is followed by an outlay of Rs 1,772 crore for electric two-wheelers, and Rs 907 crore for electric three-wheelers, he said.
Additionally, Rs 500 crore has been earmarked for hybrid ambulances.
To roll out the benefits under the scheme, the Union Ministry of Heavy Industries will be introducing e-vouchers for EV buyers to avail demand incentives. At the time of purchase, the scheme portal will generate an Aadhaar authenticated e-voucher for the buyer.
The e-vouchers will ensure that there are no leakages in disbursal of subsidy to the buyer from the dealership, the minister said.
Notably, the PM E-Drive lays special emphasis on building charging infrastructure—a major bottleneck in large-scale adoption of electric vehicles in India. The scheme proposes the installation of 22,100 fast chargers for electric cars, 1,800 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.
The scheme 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. However, only 2,700 charging points were installed during the period.
FAME-II was replaced by the Rs 500-crore Electric Mobility Promotion Scheme 2024, which is set to run its course till Sept. 31.
