India's Ministry of Heavy Industries caps incentives and tightens deadlines for electric two- and three-wheelers
Vehicle manufacturers must price two‑wheelers ≤₹1.5L and three‑wheelers ≤₹2.5L
Change
India's Ministry of Heavy Industries has fixed registration cutoffs—electric two‑wheelers by July 31, 2026 and electric three‑wheelers by March 31, 2028—and set ex‑factory price ceilings for subsidy eligibility at ₹1.5 lakh (two‑wheelers) and ₹2.5 lakh (three‑wheelers) under the PM E‑DRIVE scheme.
Why it matters
Scheme disbursements are limited to a total of Rs 10,900 crore; if those funds are exhausted before March 31, 2028, the scheme or affected subcomponents will close and no further claims will be entertained. The electric three‑wheeler L5 sub‑component closed on December 26, 2025 after meeting its target, and the scheme enforces per‑subcomponent volume caps of 2,479,120 two‑wheelers and 39,034 three‑wheelers.
Implications
- — Vehicle manufacturers' pricing teams must set ex‑factory prices at or below ₹1.5 lakh for two‑wheelers and ₹2.5 lakh for three‑wheelers before vehicle registration — vehicles priced above these ceilings will be ineligible for PM E‑DRIVE incentives.
- — Fleet procurement teams and dealer registration teams must complete registrations and submit subsidy claims for electric two‑wheelers by July 31, 2026 and for electric three‑wheelers by March 31, 2028, or file them before the scheme's total Rs 10,900 crore is exhausted — late or post‑exhaustion claims will be rejected.
Unlock the full brief.
Implications — what this forces you to change
Who is affected — which roles and obligations are exposed
What to watch — binding deadlines and enforcement dates
Real-time alerts — delivered the moment a binding change is published
Clarify with AI — turn any brief into a decision for your role
Start free trial
No credit card · $29/month (~₹2,400) after trial · Active in seconds
Source
View on Economic Times