Buying an electric two-wheeler? Govt extends subsidy - here's how much you save now

The government has extended the subsidy for electric two-wheelers under the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme by four months. Electric scooters and motorcycles will now be eligible for incentives of ₹2,500 per kilowatt hour (kWh) capped at ₹5,000 per vehicle, till July 31, 2026.

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The scheme is designed to incentivise up to 24.79 lakh electric two-wheelers, covering models priced up to Rs 1.5 lakh (ex-factory), with an overall outlay of Rs 1,772 crore.

This comes days after the Department-Related Parliamentary Standing Committee on Industry recommended extending demand incentives for e-2Ws up to March 31, 2028, the terminal year of PM E-DRIVE, with a calibrated tapering mechanism to avoid policy shocks in a segment that has shown strong adoption and supports large-scale livelihoods.

The progress of the PM E-DRIVE Scheme, with a total outlay of Rs 10,900 crore, remains heavily concentrated in the electric two-wheeler and electric three-wheeler segments.

The Parliamentary panel, earlier in March, recommended the introduction of a consumer subsidy for electric four-wheelers to reduce the upfront cost differential between electric vehicles (EVs) and internal combustion engine (ICE) vehicles.

“In the absence of a consumer-oriented subsidy, the transition in the four-wheeler segment — particularly among middle-class and private buyers — may remain slow and sub-optimal,” the committee noted.

It also flagged limited fund utilisation for electric vehicle public charging infrastructure under the PM E-DRIVE scheme. The Committee observed that the existing differentiated subsidy structure provides limited support for chargers in Categories C (all other locations not included in Government/PSU-linked categories) and D (battery swapping and battery charging stations), which may restrain private investment and slow expansion of charging networks in commercially important and high-demand locations.

As on January 2026, claims relating to 2,32,588 electric vehicles are under process for reimbursement to original equipment manufacturers (OEMs) under the PM E-DRIVE scheme, with the bulk relating to the e-2W segment, the panel said. Delays were attributed to the non-integration of certain State vehicle registration portals with the National Vehicle Registration Portal (VAHAN) and the availability of masked customer data, which hindered verification.