Cabinet Approves ₹109 Billion PM E-DRIVE Program to Boost Electric Mobility

The Cabinet also allocated ₹34 billion to procure 38,000 e-buses by FY 2029

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The Union Cabinet has approved the ‘PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Program,’ and the ‘PM-eBus Sewa-Payment Security Mechanism (PSM) Program.’

The PM E-DRIVE Program, with a total outlay of ₹109 billion (~$1.29 billion), focuses on providing demand incentives, deploying electric vehicles (EV), and developing charging infrastructure to support wider EV adoption.

The PM-eBus Sewa-Payment Security Mechanism (PSM) Program, with an outlay of ₹34.35 billion ($409 million), will support the procurement and operation of over 38,000 electric buses from FY 2024-25 to FY 2028-29.

PM E-DRIVE Program

The program allocates ₹36.79 billion ($438.1 million) in subsidies to promote electric two-wheelers (e-2Ws), three-wheelers (~$e-3Ws), e-ambulances, e-trucks, and e-buses. Specifically, it aims to support the deployment of 2.479 million e-2Ws, 316,000 e-3Ws, and 14,028 e-buses.

As part of this effort, the Ministry of Heavy Industries (MHI) is introducing e-vouchers to streamline the availability of demand incentives. Upon purchasing an EV, the buyer will receive an Aadhaar-verified e-voucher, which must be presented to the dealer. The buyer and the dealer will sign the e-voucher, which will then be uploaded to the PM E-DRIVE portal, allowing the Original Equipment Manufacturers (OEMs) to claim reimbursement for the incentives.

E-Ambulances

A significant new initiative under the program is the allocation of ₹5 billion ($59.5 million) for deploying e-ambulances to improve patient transport through environmentally friendly EVs. The safety and performance standards for these e-ambulances will be developed in consultation with various stakeholders, including the Ministry of Health and Family Welfare and the Ministry of Road Transport and Highways (MoRTH).

Additionally, ₹43.91 billion ($522.8 million) has been set aside to procure 14,028 e-buses deployed in nine major cities with populations exceeding 4 million. This initiative will also support the operation of intercity and interstate e-buses, prioritizing cities and states replacing older buses in line with MoRTH’s Vehicle Scrapping Policy.

The program also addresses the issue of air pollution caused by conventional trucks, allocating ₹5 billion ($59.5  million) to incentivize the adoption of e-trucks. Incentives will be given to those scrapping older vehicles at MoRTH-approved scrapping centers.

To address range anxiety, the program promotes the installation of 22,100 fast chargers for electric four-wheelers, 1,800 fast chargers for e-buses, and 48,400 fast chargers for e-2Ws and e-3Ws in cities with high EV penetration and select highways. The total outlay for this charging infrastructure is ₹20 billion ($238.1 million).

In support of the growing EV ecosystem, the program will modernize MHI’s testing agencies to accommodate new and emerging EV technologies, with ₹7.8 billion ($92.8 million) allocated for this purpose. The overall objective of the PM E-DRIVE program is to promote the mass adoption of EVs by offering incentives and creating a robust charging infrastructure to reduce the environmental impact of transportation and improve air quality.

PM-eBus Sewa Program

The PM-eBus Sewa-Payment Security Mechanism Program will support the procurement and operation of over 38,000 electric buses from FY 2024-25 to FY 2028-29. Since most buses currently operated by Public Transport Authorities (PTAs) run on diesel or CNG, leading to significant environmental impact, this program encourages the shift to e-buses.

PTAs will adopt a public-private partnership model under the gross cost contract approach, allowing OEMs to procure and operate e-buses without requiring upfront payments from the PTAs. To address concerns over payment defaults by PTAs, CESL, the implementing agency, will ensure timely payments to OEMs through a dedicated fund. CESL will make the necessary payments in case of default, which will later be recouped by the PTAs or respective states and union territories.

These programs collectively aim to drive the adoption of electric vehicles, enhance public transportation, and reduce air pollution, contributing to India’s green mobility goals.

Last March, a parliamentary committee recommended that the FAME program be extended by two years beyond the current March 31, 2024 deadline, as it felt that removing government subsidies for EVs would make the vehicles expensive.

With 1.53 million units sold in India in 2023, EV sales saw a 50% year-over-year jump. EVs accounted for nearly 6.4% of overall automobile sales during the year.

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