PM E-Drive Subsidy To Halve From April, Industry Says Challenging EMPS-2024 implemented for the period from 1st April 2024 to 30th September 2024 is subsumed under this scheme.
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-Drive) Scheme with an outlay of INR10,900 crore, which has come into effect today, cuts the subsidy into half for two-wheelers from 2025.
According to the government, the demand incentive of INR 5000 per kilowatt hour will be provided to buyers as an upfront reduced purchase price of the E2W. The subsidy has been capped at INR 10,000 per vehicle.
However, with start of FY2025-26, the demand incentive will be reduced to INR 2500 per kilowatt hour while subsidy has been capped at INR 5000 per vehicle. The incentive will further be capped at 15 per cent of ex-factory price.
"It is proposed to extend a demand incentive of INR 5,000 per kWh in FY 2024-25 and of INR 2,500 per kWh in FY 2025-26 for e-2W and e-3W categories. The incentive for e-2W/ e-3W shall be further capped at 15% of ex-factory price," the notification issued by the government stated.
The incentives will also be halved for electric three-wheeler in the L5 category from INR 5000 per kWh to INR 2500 next fiscal. The overall incentive limit per vehicle will also go down from INR 50,000 to INR 25000 in FY26.
The Electric Mobility Promotion Scheme (EMPS)-2024 implemented for the period from 1st April 2024 to 30th September 2024 is subsumed under this scheme.
Lauding the efforts by central government, Nehal Gupta, founder and Managing Director, Accelerated Money For U said that rebalancing incentives can be challenging in the very near term for the producers and consumers, but this encourages innovation, cost efficiency, and competition within the electric vehicle segment.
"The roll out of the PM E-Drive scheme is a step forward on India's journey toward sustainable transportation. A streamlining of the incentives for two- and three-wheelers, from April 2025, shows that speed in market growth must be balanced with a long-term industry sustainability drive. Rebalancing incentives can be challenging in the very near term for the producers and consumers, but this does encourage innovation, cost efficiency, and competition within the electric vehicle segment," Gupta said.
She also said that the scheme will be effective only if all the stakeholders, including OEMs, policymakers, and financial institutions, would come together and create a supportive ecosystem for innovation and affordability in the electric space.
Demand incentives are an important component of the scheme which directly help in demand generation of EVs by way of reducing the cost of acquisition. Demand incentive shall be available for consumers in the form of an upfront reduced purchase price of EVs to enable wider adoption, which will be reimbursed to the OEM by the Government of India.
Dinesh Arjun, Co Founder and CEO, Raptee Energy also lauded the initiative and said that PM E-DRIVE scheme is a big boost for the EV industry which is on its growth trajectory. "This scheme is a comprehensive scheme that addresses all key sectors of the electric vehicle ecosystem, including charging infrastructure, manufacturing, and demand-side incentives. It provides holistic support by fostering testing and standardization facilities, ensuring a well-rounded approach to EV development starting from Electric 2 Wheelers to Electric Buses," he said.
Meanwhile, Amit Raj Singh, Founder and Managing Director of Gemopai said that the comprehensive guidelines laid out under the scheme will drive faster adoption of EVs, bringing clean transport closer to the farthest corners of this country.
"There are certain shortcomings in this area due to the planned incentives for two- and three-wheelers to be abolished in April 2025. The long-term thrust of a self-reliant EV market is important but near-term support is what will not let this momentum fade away," he said.
Addressing the launch at Bharat Mandapam, Additional Secretary of Ministry of Heavy Industries Hanif Qureshi said a mobile app will be introduced for e-vouchers for availing subsidy under the scheme to make the entire process seamless and error free.
"One vehicle per Aadhaar will be allowed. As soon as the vehicle is sold, e-voucher will be generated," he said.
The scheme also addresses the concern of range anxiety by promoting the installation of electric vehicle public charging stations (EVPCS). These EVPCS shall be installed in select cities with high EV penetration and also on selected highways.
Hitendra Vigamal, Head, Sales, BRIGHTBLU India said that the scheme is a landmark initiative aimed at accelerating India's transition to electric mobility, offering financial incentives to consumers, promoting the establishment of a nationwide EV infrastructure, and strengthening local manufacturing capabilities.
"With a total budget of INR 10,900 crore, the scheme is expected to play a crucial role in making electric vehicles more accessible, reducing dependence on fossil fuels, and fostering sustainable environmental practices," he posted on mirco-bloging site X.
