PM E-Drive Extended to FY28; e3W Subsidies to End After FY26

The Indian government has extended the PM E-Drive scheme until March 2028, giving electric mobility a longer policy runway. At the same time, it has decided to end subsidies for electric three-wheelers (e3Ws) after March 2026. This update reshapes how the sector moves forward.

Policy Shift With a Clear Timeline

The scheme, which replaced the older FAME program, now focuses more on electric buses, two-wheelers, and small commercial vehicles. While support continues in those areas, e3Ws will no longer get incentives beyond FY26. This shift reflects how the segment has matured over time.

Electric three-wheelers have grown fast. They cost less to run, are easy to maintain, and are used widely for short trips and cargo. Because of this, the government believes they can now compete without help. It’s not a sudden move—the industry has two years to adjust.

Financial Structure and Allocation

The government has set aside ₹500 crore for FY25. This will cover subsidies for both electric two-wheelers and three-wheelers. But after FY26, only other segments—like buses and cargo EVs—will continue to get benefits.

The intent is clear: shift funds to where the impact is greater. Public transport and freight have more emissions. Helping these areas switch to EVs will cut pollution faster.

Mixed Industry Reaction

Some in the industry are glad to see the policy extended. It gives clarity. Others, especially e3W makers, are concerned. In smaller towns, cost is still a barrier. Many buyers rely on the subsidy to afford electric options.

But most agree that subsidies can’t last forever. With a clear deadline, businesses can plan ahead. This way, the transition is smooth, not sudden.

From Subsidies to Market Strength

India now moves towards a market-led EV shift. The PM E-Drive extension backs this vision. As subsidies fade, other efforts will take over. These include:

• Building better charging infrastructure
  
• Increasing battery production within India
  
• Promoting recycling and reuse systems

The government wants clean transport to grow—not just with money, but with smart systems and strong demand.

Final Outlook

The extension of PM E-Drive shows that the government is still serious about electric vehicles. Ending e3W subsidies signals confidence in that market. Now, the focus is on segments that need more help. The EV story continues—but in a new phase.

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