What is PM E-DRIVE scheme? How does it benefit EV buyers?

The government of India has introduced the PM E-DRIVE scheme to further support the country’s electric vehicle journey. Intended to be the successor of the FAME scheme, the government has allocated a budget of Rs 10,900 crore for PM E-DRIVE, which will be spent over the next 2 years. A major focus of the scheme is to provide subsidies to lower the upfront cost of EVs for consumers.

Overview:

Under the PM E-Drive scheme, the government plans to support the deployment of 24.79 lakh electric two-wheelers & 3.16 lakh electric three-wheelers. The largest portion of the budget, Rs 4391 crore, has been allocated for the procurement of 14,028 electric buses for state & public transport agencies. Also, Rs 500 crore will go towards deploying e-ambulances, and another Rs 500 crore to support the adoption of electric trucks. The scheme also highlights EV charging infrastructure, with an ambitious plan to install 22,100 DC fast-charging stations for electric cars, 1800 high-capacity EV chargers for electric buses and 48,400 public EV chargers for electric two & three-wheelers. The power ministry has directed lower charging rates for EVs during daytime solar hours (9 AM to 4 PM) until March 31, 2028.

PM E-Drive timeframe:

FAME-II scheme was succeeded by the temporary Electric Mobility Promotion Scheme (EMPS) which had an allocation of Rs 778 crore. EMPS was valid till September 30, and has now been absorbed by the PM E-DRIVE scheme. The new scheme will be in effect from October 1, 2024 to March 31, 2026. The PM E-Drive will start with the same subsidies as the EMPS for electric two & three-wheelers but in its 2nd year the subsidies per vehicle for two & three-wheelers will be halved.

Subsidy for electric two-wheelers:

For FY2024-25, the scheme proposes a subsidy of Rs 5000 per kWh for electric two-wheelers subject to a maximum of Rs 10,000 per vehicle. This will be reduced to Rs 2500 per kWh in FY2025-26 (from April 2025) with a cap of Rs 5000 per vehicle.

Suppose you plan on buying an Ather 450S electric scooter, which has an ex-showroom price of Rs 1.57 lakh in Mumbai, you will be eligible for a subsidy of Rs 10,000 under PM E-Drive scheme in financial year 2024-25. From April 2025, this subsidy will be halved. The Ather 450S comes with a 2.9 kWh battery. At present, PM E-Drive scheme provides a subsidy of Rs 5000 per kWh, therefore, the applicable subsidy for the Ather 450S is Rs 5000×2=Rs 10,000.

Subsidy for electric three-wheelers:

For FY2024-25, the scheme proposes a subsidy of Rs 5000 per kWh for e-rickshaws & e-carts subject to a maximum of Rs 25,000 per vehicle. This will be reduced to Rs 2500 per kWh in FY2025-26 (from April 2025) with a cap of Rs 12,500 per vehicle.

Similarly, for passenger & cargo electric autos, the scheme proposes a subsidy of Rs 5000 per kWh with a cap of Rs 50,000 per vehicle in FY2024-25. This will be reduced to Rs 2500 per kWh in FY2025-26 (from April 2025) with a cap of Rs 25,000 per vehicle.

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Suppose you plan on buying a Mahindra Treo Zor cargo electric three-wheeler, which has an ex-showroom price of Rs 3.13 lakh, you will be eligible for a subsidy of Rs 35,000 under PM E-Drive scheme in financial year 2024-25. From April 2025, this subsidy will be halved. The Mahindra Treo Zor comes with a 7.37 kWh battery. At present, PM E-Drive scheme provides a subsidy of Rs 5000 per kWh, therefore, the applicable subsidy for the Treo Zor is Rs 5000×7=Rs 35,000.

Subsidies at a glance:

The scheme’s total outlay of Rs 10,900 crore is spread over 2 years, with Rs 5,047 crore allocated for FY2024-25 & Rs 5,853 crore for FY2025-26.

How to claim subsidy while purchasing an EV:

The PM E-Drive scheme has introduced a new feature of e-Vouchers. 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 will be sent to the buyer’s registered mobile number. The buyer will then sign the e-Voucher and submit it to the dealer to avail the subsidy.

After this, the e-Voucher will also be signed by the dealer and uploaded on the PM E-DRIVE portal. The signed e-Voucher will be sent to the buyer & dealer via SMS. The signed e-Voucher will be essential for the OEM to claim reimbursement of subsidy under the scheme.

Conclusion:

The government’s website states that “the primary objective of the PM E-DRIVE scheme is to expedite the adoption of EVs by providing upfront incentives for their purchase, as well as by facilitating the establishment of essential charging infrastructure for EVs.” Apart from the subsidy provided by the central government, state governments also offer subsidies on EVs. Details related to that can be accessed here: STATE LEVEL POLICIES (niti.gov.in)

With the introduction of e-Vouchers, the process of receiving subsidy (for the consumers) and the process of reimbursement of subsidy (for the OEMs) has been streamlined and made easier than ever.