Govt notifies Rs 10,900-Cr PM E-DRIVE scheme to expand EV adoption

The government has notified the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme with an outlay of Rs 10,900 crore from October 2024 to March 2026.

The scheme, which was approved by the Union Cabinet earlier this month, will come into effect on October 1. It aims to boost electric mobility in India through incentives and by promoting public charging infrastructure.

The new scheme builds on the foundation laid by the previous Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME) scheme, which expired in March this year, and the temporary Electric Mobility Promotion Scheme, which expires on September 20, 2024.

Increasing EV adoption

FAME schemes primarily focused on certain categories of electric vehicles, predominantly electric two-wheelers (e2Ws) and three-wheelers (e3Ws). The PM E-DRIVE scheme expands the vehicle categories eligible for incentives to include new and emerging EV types such as e-ambulances and e-trucks, as the government encourages transition to electric mobility across various sectors, including public transport and logistics.

The PM E-DRIVE scheme introduces more structured and enhanced demand incentives. Under the new scheme, the incentive structure is based on battery capacity, with specific rates for different vehicle categories.

For instance, the incentive for e2Ws and e3Ws is set at Rs 5,000 per kWh in FY 2024-25 and Rs 2,500 per kWh in FY 2025-26, with an upper cap at 15% of the ex-factory price. This shift towards performance-based incentives aims to encourage manufacturers to improve battery technology and vehicle efficiency.

The scheme has an outlay of Rs 2,000 crore dedicated to setting up public charging infrastructure in urban areas as well as inter-city and inter-state highways.

It also establishes an inter-ministerial empowered committee, known as the Project Implementation and Sanctioning Committee (PISC), which is responsible for the overall monitoring and sanctioning of projects under PM E-DRIVE.

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Local manufacturing and phased manufacturing program (PMP)

The PM E-DRIVE scheme has introduced a phased manufacturing programme (PMP) for OEMs (Original Equipment Manufacturers). It aims for local production and requires OEMs to follow specific localisation guidelines to be eligible for support, promoting the development of an indigenous EV manufacturing ecosystem.

The PM E-DRIVE scheme also focuses sustainability. The scheme encourages the integration of renewable energy sources into charging infrastructure, fostering the development of a smart grid and promoting environmentally friendly energy solutions.

It also includes provisions for administrative expenses and the engagement of knowledge partners and technical experts, allocating Rs 50 crore for information, education and communication activities.