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Central Government Incentives

1. 1. PM E-DRIVE Scheme (2024-2026)
      Replacing the FAME II scheme (ended March 2024), the Prime Minister’s Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) was approved in September 2024 with a ₹10,900 crore budget. Key subsidies for buyers include:
      • • Electric Two-Wheelers (e-2W): ₹10,000 per vehicle until March 31, 2025; reduces to ₹5,000 from April 1, 2025.
      • • Electric Three-Wheelers (e-3W): ₹50,000 per vehicle until March 31, 2025; reduces to ₹25,000 from April 1, 2025.
      • • E-Trucks: ₹5 billion allocated to incentivize replacement of old trucks, with subsidies tied to scrappage (exact amounts TBD).
      • • E-Ambulances: ₹5 billion for deployment, with specific subsidies still under clarification.
      • • Does not directly cover electric cars (e-4W) for private buyers yet, focusing on public and commercial segments.

1. 1. Tax Benefits
      • • GST: EVs attract a reduced GST rate of 5%, compared to 28% + cess for internal combustion engine (ICE) vehicles.
      • • Income Tax Rebate: Under Section 80EEB, buyers can claim up to ₹1.5 lakh on interest paid on EV loans (applies to first-time buyers).

1. 1. New EV Policy (March 2024)
      • • Import duty on EVs slashed from 70-100% to 15% for vehicles costing over $35,000, provided companies invest $500 million in India and achieve 25% domestic value addition (DVA) by Year 3. Benefits Tesla and premium EV makers but not directly tied to consumer subsidies.

1. 1. Road Tax & Registration
      • • The Ministry of Road Transport and Highways exempts EVs from registration fees (renewal/issue), reducing upfront costs nationwide.

State-Level Incentives

State governments supplement central schemes with their own policies. Benefits vary widely, and some states have capped or exhausted quotas (e.g., Delhi’s e-4W limit). Below are highlights from top EV-friendly states as of 2025:

1. 1. Delhi
      • • Subsidies: Matches FAME II (now PM E-DRIVE) rates—₹5,000/kWh for e-2W (up to ₹30,000) and ₹10,000/kWh for e-4W (up to ₹1.5 lakh, exhausted for first 1,000 cars).
      • • Exemptions: 100% waiver on road tax and registration fees.
      • • Note: e-4W subsidy halted after hitting 1,000-unit cap; focus now on e-2W and e-3W.

1. 1. Maharashtra
      • • Subsidies: ₹5,000/kWh for e-2W (up to ₹25,000) and ₹10,000/kWh for e-4W (up to ₹1.5 lakh). Early bird incentives (up to ₹1 lakh for e-4W) expired in 2021.
      • • Scrappage: Up to ₹25,000 for e-4W and ₹7,000 for e-2W if scrapping old vehicles.
      • • Exemptions: 100% road tax and registration fee waiver until 2025.

1. 1. Gujarat
      • • Subsidies: ₹10,000/kWh for e-2W (up to ₹20,000) and e-4W (up to ₹1.5 lakh).
      • • Exemptions: Registration fee waiver; road tax at 50% (not fully exempt).

1. 1. Haryana
      • • Subsidies: 15% of vehicle cost—up to ₹6 lakh for e-4W (₹15-40 lakh range), ₹10 lakh for premium e-4W (₹40-70 lakh), and ₹3 lakh for hybrids.
      • • Exemptions: 100% road tax and registration fee waiver.
      • • Note: Most generous for premium EVs and hybrids.

1. 1. Tamil Nadu
      • • Exemptions: 100% road tax and registration fee waiver (under review as of 2025).
      • • Subsidies: No direct buyer incentives; focus on manufacturing support.

1. 1. Kerala
      • • Subsidies: ₹10,000–30,000 for e-rickshaws; no direct e-4W incentives.
      • • Exemptions: 50% road tax discount for first 5 years.

1. 1. Odisha
      • • Subsidies: 15% of cost—₹5,000 for e-2W, ₹10,000 for e-3W, ₹50,000 for e-4W (until Dec 31, 2025).
      • • Exemptions: 100% motor vehicle tax and registration fee waiver until 2025.

1. 1. Uttar Pradesh
      • • Subsidies: 15% for e-4W (up to ₹1 lakh) for first 25,000 cars.
      • • Exemptions: 100% road tax and registration fee waiver for 3 years (5 years if manufactured in-state).

Key Considerations for Buyers

• • Eligibility: Subsidies often depend on battery capacity, ex-factory price (e.g., ₹15 lakh cap for PM E-DRIVE e-4W), and purchase timing (e.g., early bird offers).

• • Availability: Some states have limited quotas (e.g., Delhi’s 1,000 e-4W cap), so check local status.

• • Charging Support: PM E-DRIVE allocates ₹4,391 crore for 14,028 e-buses and ₹2,000 crore for 10,763 public charging stations, indirectly benefiting buyers by improving infrastructure.

• • Savings: Combined incentives can reduce costs by ₹50,000–₹2.5 lakh for e-4W, ₹20,000–₹44,000 for e-2W, depending on state and scheme.

Outlook for 2025

India’s EV subsidy landscape is shifting toward commercial and public transport (e.g., e-buses, e-trucks) under PM E-DRIVE, with fewer direct incentives for private e-4W buyers compared to FAME II. However, tax breaks, import duty cuts for premium EVs, and state waivers keep costs competitive. Experts like Commerce Minister Piyush Goyal (January 2025) argue existing incentives suffice due to falling battery costs and rising EV adoption (7% of sales in FY 2023-24). For buyers, combining central and state benefits can still save lakhs—especially in states like Haryana, Maharashtra, and Gujarat.