Electric Vehicles (EVs) are no longer the future of Indian mobility—they are the present. Rising fuel prices, climate concerns, and rapid improvements in EV technology have made electric mobility an attractive option for individuals, businesses, and public transport operators alike. One of the biggest reasons behind this shift is strong government support through EV subsidies in India.
These subsidies significantly reduce the upfront cost of electric vehicles, making them competitive with petrol and diesel alternatives. From electric scooters and cars to e-buses and e-trucks, central and state governments are actively incentivising EV adoption to reduce pollution, cut oil imports, and meet long-term climate goals.
This in-depth guide explains everything you need to know about electric vehicle subsidies in India—schemes, subsidy amounts, state-wise benefits, eligibility, documents, application steps, and frequently asked questions—written in a clear, practical, and trustworthy way.
What Are Electric Vehicle (EV) Subsidies?
Electric Vehicle subsidies are financial incentives provided by the Government of India and individual state governments to make EVs more affordable for buyers. These incentives are designed to:
- Encourage people to switch from petrol/diesel vehicles
- Reduce air pollution and carbon emissions
- Lower India’s dependence on imported fossil fuels
- Support domestic EV and battery manufacturing
Subsidies can come in different forms, such as direct price reductions, tax exemptions, reduced GST, and waived road tax or registration fees. The exact benefit depends on the vehicle type, battery size, and the state where the vehicle is registered.
Why EV Subsidies Are Important in India
India faces severe urban air pollution and rising fuel import bills. EV subsidies directly address these challenges by:
- Making EVs affordable for middle-class buyers
- Encouraging clean public transport like e-buses
- Supporting last-mile mobility through e-rickshaws
- Creating jobs in EV manufacturing and charging infrastructure
With India targeting 30% EV penetration by 2030 and net-zero emissions by 2070, subsidies play a critical role in accelerating adoption at scale.
Central Government Schemes for EV Subsidies in India
The central government has launched multiple schemes to support EV buyers and manufacturers. The most important ones are explained below.
FAME-II Scheme (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles)
The FAME‑II Scheme is India’s flagship EV subsidy programme.
Key Highlights of FAME-II
- Launched: April 2019
- Budget: ₹10,000 crore
- Validity: Extended until March 2024
- Focus Areas: Demand incentives, charging infrastructure, R&D
Vehicles Supported
- 10 lakh electric two-wheelers
- 5 lakh electric three-wheelers
- 55,000 electric four-wheelers
- 7,000 electric buses
Subsidy Structure Under FAME-II
- Two-wheelers: ₹15,000 per kWh (up to 40% of vehicle cost, capped in some states)
- Cars: ₹10,000 per kWh (up to ₹1.5 lakh for cars priced below ₹15 lakh)
- E-buses: Up to ₹20 lakh per bus (subject to bidding)
FAME-II prioritises high-speed EVs with lithium-ion batteries and localised manufacturing.
PM E-DRIVE Scheme (2024–2026)
The PM E‑DRIVE Scheme is the newest central subsidy programme.
Key Highlights of PM E-DRIVE
- Launched: 1 October 2024
- Budget: ₹10,900 crore
- Valid Until: March 2026
- Replaced: Electric Mobility Promotion Scheme (EMPS) 2024
Vehicles Covered
- Electric two-wheelers
- Electric three-wheelers
- E-ambulances and e-trucks
- Electric buses
Subsidy Amounts Under PM E-DRIVE
- Two-wheelers: ₹5,000 per kWh (up to ₹10,000 in Year 1)
- Three-wheelers: ₹25,000 (Year 1), ₹12,500 (Year 2)
- L5 cargo three-wheelers: ₹50,000 (Year 1)
- E-buses: ₹20,000 per kWh (for state transport units)
PM E-DRIVE focuses strongly on commercial EV adoption and public transport electrification.
PLI Scheme for Advanced Chemistry Cell (ACC) Batteries
The PLI Scheme for ACC Battery Storage supports domestic battery manufacturing.
- Budget: ₹18,100 crore
- Goal: Reduce battery costs and import dependence
- Impact: Makes EVs cheaper in the long term
While buyers don’t receive this subsidy directly, it lowers EV prices indirectly.
SPMEPCI – Scheme to Promote Manufacturing of Electric Passenger Cars in India
Approved in March 2024, this scheme aims to attract global EV manufacturers.
- Encourages investment by companies like Tesla
- Focuses on sustainable mobility and job creation
- Strengthens India’s EV manufacturing ecosystem
EV Subsidy Amounts by Vehicle Type (India)
Here’s a simplified summary of central and state subsidy ranges:
1. Electric Two-Wheelers
- Central subsidy: ₹5,000–₹15,000 per kWh
- State subsidy: Up to ₹30,000 (Delhi, Gujarat, etc.)
2. Electric Three-Wheelers
- Central subsidy: Up to ₹50,000
- State subsidy: ₹30,000–₹50,000
3. Electric Cars
- Central subsidy: Up to ₹1.5 lakh (FAME-II)
- State subsidy: Up to ₹6 lakh (Haryana)
4. Electric Buses
- Central subsidy: Up to ₹20 lakh per bus
- State incentives vary by tender
State-Specific Electric Vehicle Subsidies in India
In addition to central schemes, states offer powerful incentives.
Delhi EV Policy
Delhi remains one of the most EV-friendly regions.
- Two-wheelers: Up to ₹30,000
- Cars: Up to ₹1.5 lakh (quota exhausted)
- 100% road tax and registration fee waiver
Maharashtra EV Policy
- Cars: Up to ₹2.5 lakh
- Two-wheelers: ₹10,000 + scrappage incentive
- 25% subsidy on charging equipment
Haryana EV Policy
- Cars: Up to ₹6 lakh
- Three-wheelers: ₹50,000
- Full road tax and registration waiver
Gujarat EV Policy
- Two-wheelers: Up to ₹20,000
- Cars: Up to ₹1.5 lakh
- ₹10 lakh support for charging stations
States With Tax Waivers (No Direct Subsidy)
- Karnataka
- Tamil Nadu
- Telangana
- Andhra Pradesh
These states offer 100% road tax and registration fee exemption, reducing EV costs significantly.
How to Apply for EV Subsidies in India
Most buyers don’t need to worry about paperwork.
Step-by-Step Process
- Choose an eligible EV model
- Purchase from an authorised dealer
- Dealer applies subsidy on your behalf
- Price is reduced upfront
- OEM claims subsidy from authorities
Some states like Uttar Pradesh allow direct online applications through state portals.
Documents Required for EV Subsidy
Typically required documents include:
- Aadhaar card or government ID
- Address proof
- Vehicle invoice and registration certificate
- Insurance documents
- Bank details (for direct transfer cases)
Always confirm state-specific requirements with your dealer.
Benefits of Electric Vehicle Subsidies
EV subsidies offer long-term advantages beyond purchase price.
Financial Benefits
- Up to 40% lower upfront cost
- Running cost under ₹1 per km
- Minimal maintenance expenses
Tax Benefits
- ₹1.5 lakh deduction under Section 80EEB
- GST reduced to 5% on EVs and chargers
Environmental Benefits
- Zero tailpipe emissions
- Cleaner cities and reduced noise pollution
National Impact
- Lower oil imports
- Job creation in EV and battery sectors
Common Mistakes Buyers Should Avoid
- Assuming all EVs are subsidy-eligible
- Not checking state policy expiry dates
- Buying from non-authorised dealers
- Ignoring charging infrastructure availability
Read Also: Porsche Cayenne Electric: Price, Range, Performance, Features & Complete Luxury EV Buying Guide
Frequently Asked Questions About EV Subsidies in India
Who can apply for EV subsidies?
Any buyer of an eligible EV—individuals, businesses, and fleet operators.
Do I need to apply separately?
Usually no. The dealer handles it.
Are electric cars subsidised?
Yes, under FAME-II and state policies.
Can businesses get subsidies?
Yes, especially for e-buses, e-trucks, and e-rickshaws.
Why are EV subsidies important?
They make EVs affordable, reduce pollution, and support green mobility.
Conclusion: Are EV Subsidies Worth It?
Absolutely. Electric vehicle subsidies in India have transformed EVs from a premium option into a practical choice. With central schemes like FAME-II and PM E-DRIVE, combined with generous state incentives, EV ownership is now financially sensible and environmentally responsible.
Whether you’re buying an electric scooter, car, or commercial vehicle, this is the best time to switch to electric mobility in India. By choosing an EV, you’re not just saving money—you’re investing in a cleaner, smarter future.
7 thoughts on “Electric Vehicle Subsidies in India: A Complete Guide 2026”