PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme

What it does

The Ministry of Heavy Industries notified the scheme as S.O. 4259(E) on 29 September 2024, for the period 1 October 2024 to 31 March 2026, with an outlay of INR 10,900 crore. It is a scheme of financial support and not a regulatory statute: it sets out who may claim money from the Government and on what conditions.

The notification does not say that FAME-II is repealed. It records that the scheme was formulated after a review of FAME-II and the Electric Mobility Promotion Scheme 2024, and it states that the number of vehicles and the expenditure under the latter are subsumed under the number of vehicles and outlay of the new scheme. The predecessor was absorbed and not replaced.

The money is divided into two kinds. Demand incentives, which reduce the price of a vehicle at the point of sale and are reimbursed to the manufacturer, took INR 3,679 crore. Grants for capital assets took INR 7,171 crore, covering electric buses, public charging stations and the upgradation of testing agencies, and a further INR 50 crore went to administration.

Who it binds

It governs those who claim under it. A vehicle manufacturer is in the first group, claiming the demand incentive. A state transport undertaking, a charge point operator and a testing agency are in the second, claiming grants. A manufacturer must be registered with the Ministry, each model must be separately approved, and the vehicle must carry an advanced battery meeting the performance criteria in the notification, so a lead acid battery does not qualify. The model must also meet the phased manufacturing programme in Annexure-5, which requires local manufacture and assembly of listed parts.

What has changed, and when

The scheme was extended on 7 August 2025 from two years to four, to 31 March 2028, within the same outlay. That extension did not carry every component with it. The terminal date for registered electric two-wheelers, registered e-rickshaws and e-carts, and electric three-wheelers in the L5 category was left at 31 March 2026. Electric three-wheelers in the L5 category then closed on 26 December 2025, once their targets were met. Electric two-wheelers and the e-rickshaw and e-cart components were extended by a notification of 27 March 2026.

S.O. 4424(E) of 10 August 2026 raised the outlay to INR 11,900 crore, restated the scheme period as 1 April 2024 to 31 March 2028, and extended the electric two-wheeler timeline. It also fixed the last date for submitting a claim under any component as 31 December 2027. If funds or targets under a component are exhausted before the end of the scheme, that component closes and no further claim is entertained. The phased manufacturing programme has also been amended more than once, most recently for electric buses and for certain electric trucks on 3 September 2026.

What turns on it in practice

The firm's note on manufacturing and incentives makes one point of particular use to a manufacturer. A headline that runs to March 2028 is the wrong date to plan against, twice over. The claim window shuts fifteen months before the scheme does, and a component may close before either. The localisation condition that applies to a model is the one in force when the vehicle is invoiced, not the one in force when the model was approved.

The same note explains why the scheme cannot be read alone. A vehicle that earns a demand incentive also creates an extended producer responsibility obligation under the Battery Waste Management Rules, 2022. One ministry pays and another charges, and the two sets of conditions are drafted without reference to each other. For a two-wheeler maker the collection target under those rules begins to apply in the financial year 2026-27, and the requirement of recycled content in new batteries starts in 2027-28. A manufacturer modelling the economics of a vehicle therefore has to put the incentive and the battery liability side by side.

An individual buyer's incentive passes through an electronic voucher generated after Aadhaar based authentication in the scheme application. A sale documented without the voucher is one the Ministry has no mechanism to reimburse.