PM E-Drive Scheme Replaces FAME: No Incentive for E-Vehicles

The Union Cabinet approved the PM E-Drive Scheme on September 11, with a budget of ₹10,900 crore over two years, aimed at boosting electric vehicle (EV) sales in India. 

The scheme offers ₹3,679 crore in incentives to promote the use of battery-powered two- and three-wheelers, ambulances, trucks, and other advanced EVs. 

Who will Benefit from PM E-Drive Scheme?

At a press briefing, Information and Broadcasting Minister Ashwini Vaishnaw announced that 88,500 locations will receive full funding for charging infrastructure under the PM Electric Drive Revolution for Innovative Vehicle Enhancement (PM E-DRIVE) Scheme. He also emphasized that this investment complements the existing Production-Linked Incentive (PLI) schemes for the automotive and auto components sectors.

Main Elements of the Scheme

The following are the scheme's main elements: Subsidies/Demand incentives worth Rs 3,679 crore have been provided to promote e-2Ws, e-3Ws, e-ambulances, e-trucks and other upcoming EVs. According to a government announcement on the decision, "24.79 lakh e-2Ws, 3.16 lakh e-3Ws, and 14,028 e-buses will be supported by the scheme."

Additionally, public transportation organizations and state transportation undertakings have allocated Rs 4,391 crore for the purchase of 14,028 e-buses. For the market of battery-operated buses, there is also the PM-eBus Sewa Payment Security Mechanism of Rs 3,435 crore under this plan. An additional amount of Rs 500 crore has been set aside for the use of e-ambulances. An amount of Rs 500 crore has been set aside to encourage the use of electric trucks.

No Incentive for E-Cars

The minister highlighted that the allocation for e-ambulances is a new government initiative aimed at improving patient transport comfort. However, he made it clear that this policy does not offer any incentives for electric cars and will not include hybrid vehicles.

The PM E-Drive Scheme replaces the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) Scheme, which was introduced in April 2015. The FAME scheme lasted for nine years in two phases. In the second phase, which ended on March 31, 2024, the government supported 13,21,800 electric vehicles with subsidies totaling Rs 11,500 crore.