Government Subsidies On Cargo Electric 3-Wheeler Under PM E-Drive Scheme

Following the sales targets achieved early, the Indian government has extended the subsidies for electric 3-wheeler cargo vehicles but at a reduced subsidy rate of Rs 25,000 per unit.

Key Highlights

• Following the sales targets of electric cargo 3-wheelers achieved early, the government has extended the subsidies but at a reduced subsidy rate.
• For the sale of eligible EV 3-wheelers (L5 category), the government will now provide subsidies at a rate of Rs 2,500 per kW, up to a maximum of Rs 25,000 per unit.
• Previously available for 1,24,846 units of e-3Ws (L5) for the fiscal year 2025-2026 starting in April 2025, the incentive is now available starting on November 8, 2024.

Once the sales target of electric 3-wheeler cargo vehicles under the PM E-Drive scheme was met just a few weeks after the launch of this scheme, the central government stopped offering subsidies for this vehicle segment temporarily. Recently, the Indian government has reinstated subsidies for electric cargo 3-wheelers (E3Ws of the L5 vehicle category) but at a reduced rate.

Similar to its predecessor FAME scheme, the PM E-Drive scheme aims to increase sales of locally produced vehicles. Electric 2-wheelers (E2Ws) will also be eligible for a reduced subsidy once PM E-Drive targets under this category for the current fiscal year are met and it is expected to be met by February 2025.

Related Link: India E-Truck Exchange Event Calls For Effective Utilisation Of Subsidy Under PM E-Drive

Subsidies For Electric Cargo 3-Wheelers In India

Union Government will now offer subsidies for qualified electric 3-wheelers (L5 category) sales at a discounted cost of Rs 2,500 per kW, with a maximum of Rs 25,000 per unit. It represents half of the first subsidy that the Ministry of Heavy Industries (MHI) provided to encourage the use of locally manufactured e3w (L5) units.

According to official data, OEMs (Original Equipment Manufacturers) reported selling about 6,90,000 units of E2Ws and 82,000 units of E3Ws. In the upcoming 3 months, companies are expected to submit the necessary paperwork to the Ministry of Heavy Industries to request subsidies for these EVs.

Additionally, sales made under the previous Electric Mobility Promotion Scheme 2024 have been incorporated into PM E-Drive, which has been in effect since October 2024. The senior government official said that the incentive which was earlier applicable for the 1,24,846 units of e-3Ws (L5) for the financial year 2025-26 from April 2025, is now made available from November 8, 2024.

Conclusion

There will be incentives for 80,546 units of e-3W (L5) in the current fiscal year 2024-2025. The previous MΗI order had stated that vehicles sold and registered over the targeted number would not be eligible for incentives in the financial year. As per the order issued to all concerned OEMs, a total of 79,974 units of electric 3-wheelers (L5) were sold till November 7, 2024.

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