The central government has announced a new subsidy scheme PM e-Drive to promote the sale of electric vehicles. This scheme was implemented after the FAME II subsidy scheme ended in March this year.
However, this subsidy scheme only covers electric two-wheelers, three-wheelers, and electric buses, while electric and hybrid cars are out of this scheme. This scheme will remain in force till March 2025.
A total amount of Rs 10,900 crore has been set aside for 24,80,000 electric two-wheelers, 3,16,000 three-wheelers, and 14,028 electric buses under PM e-Drive.
It will be implemented as the third phase of the FAME scheme. Let us tell you that more than 16 lakh electric vehicles have the benefit of subsidy under the FAME-2 scheme.
The availability of charging stations will increase
In addition, Rs 500 crore each has been allocated for electric trucks and hybrid ambulances, aimed at first-time adoption of EVs in critical service areas and the commercial vehicle segment.
The scheme for trucks will provide incentives only to those who have a scrapping certificate obtained from vehicle scrapping centres approved by the Road Ministry.
The e-Drive scheme also aims to develop comprehensive charging infrastructure. Charging infrastructure development is also being promoted, with Rs 2,000 crore being provided to install 22,100 fast chargers for electric four-wheelers, 1800 fast chargers for e-buses, and 48,400 fast chargers for e-two-wheelers and three-wheelers.
Apart from the subsidy, the government has also announced a Rs 3,435 crore Payment Safety Mechanism Fund (PSMF) for 38,000 electric buses, which will reduce financial risk for bus operators and promote the electrification of the public transport network.
Electric car buyers will not get a subsidy
Private electric car buyers have been excluded from subsidy under the PM e-Drive scheme. This is a major setback for India’s largest electric car company Tata Motors and other electric passenger car manufacturers.
Union Heavy Industries Minister HD Kumaraswamy said the target is to achieve 10% EV penetration in the two-wheeler sector and 15% EV penetration in the 3-wheeler sector by March 2026 and set up the necessary charging infrastructure to accelerate the adoption of EVs.
Responding to a question about the reason for keeping electric cars out of the scheme, he said GST for private electric cars is at the lower slab of 5%.