EV Subsidy Scheme: Cabinet Approves PM E-DRIVE With An Outlay Of INR 10,900 Cr

After months of speculations over the Centre’s plans for the launch of the third iteration of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, the union cabinet has approved ‘PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme’ for the promotion of electric vehicles in the country. 

PM E-DRIVE, which will effectively replace the FAME scheme, will have an outlay of INR 10,900 Cr for a period of two years. It is pertinent to note that this is higher than the INR 10,000 Cr initial outlay of the FAME- II scheme.  

The new scheme will provide subsidies and demand incentives worth INR 3,679 Cr for electric two-wheelers (E2Ws), three-wheelers (E3Ws), ambulances, trucks and other emerging EVs. With this, the government aims to support 24.79 Lakh E2Ws, 3.16 Lakh E3Ws, and 14,028 ebuses.

Under the scheme, the Ministry of Heavy Industries (MHI) will launch e-vouchers for EV buyers to avail demand incentives. “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 shall be sent to the registered mobile number of the buyer,” a government statement said.

Further, the government has earmarked INR 4,391 Cr for the purchase of 14,028 ebuses for public transport agencies. These buses will be deployed in nine cities – Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Surat, Bengaluru, Pune and Hyderabad. Convergence Energy Services Limited (CESL) will be responsible for the demand aggregation.  

PM E-DRIVE will also boost India’s charging infrastructure by promoting installation of electric vehicle public charging stations (EVPCS). The government is targeting installation of 22,100 fast chargers for E4Ws, 1,800 fast chargers for ebuses and 48,400 fast chargers for E2Ws and E3Ws under the scheme. The budget allocation for the charging infrastructure is INR 2,000 Cr. 

“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,” the Centre said. 

Besides, the scheme also has an outlay of INR 780 Cr for the upgradation of test agencies of MHI with new and emerging technologies. The upgradation of the testing capabilities might be a direct response to the gaps observed in vehicles under the FAME-II. Companies like Hero Electric, Okinawa Autotech, Ampere EV were also fined for violations of the norms of the scheme. 

The announcement comes a few days after it was reported that the government is considering expanding the outlay for the third rendition of the FAME scheme to INR 11,000 Cr. 

FAME-II was approved in 2019 with an outlay of INR 10,000 Cr for a period of three years. However, the deadline was extended by the government from March 31, 2022 to March 31, 2024. Following this, the Centre launched the Electric Mobility Promotion Scheme (EMPS) with an allocation of INR 500 Cr as a stop-gap measure to promote EV adoption.

Besides the launch of PM E-DRIVE, the union cabinet alson approved the ‘PM-eBus Sewa-Payment Security Mechanism (PSM) scheme’ with an outlay of INR 3,435.33 Cr for procurement and operation of ebuses by public transport authorities (PTAs).