PM E-Drive Scheme Replaces FAME II: A New Era for Electric Mobility in India

After the conclusion of FAME II, the Government of India has taken a bold step forward with the introduction of the PM E-Drive Scheme – a transformative policy aimed at accelerating the adoption of electric vehicles. With a substantial budget outlay, the scheme covers electric two-wheelers, three-wheelers, buses, trucks, and ambulances, while explicitly excluding private four-wheelers.

For vehicle manufacturers and OEMs, this is more than just a policy shift – it represents a dynamic regulatory, commercial, and operational framework that demands strategic realignment. Unlike its predecessor, FAME II, the PM E-Drive Scheme emphasizes stringent compliance, localised value chains, cost ceilings, and a tech-driven incentive model – pushing OEMs to adapt quickly and innovate to remain competitive.

What Was FAME II?

Introduced as a follow-up to India’s early efforts in clean mobility, FAME II (Faster Adoption and Manufacturing of Electric Vehicles – Phase II) came into effect in 2019 with a vision to accelerate electric vehicle adoption on a national scale.

Objectives and Scope

• Promote affordable and environmentally friendly transport.
• Encourage indigenous EV manufacturing through demand-side subsidies.
• Support the setup of charging infrastructure and electric public transport (like e-buses).

Key Features

• Incentives based on battery capacity (e.g., ₹10,000 per kWh for two-wheelers).
• Focus on 2Ws, 3Ws, 4Ws, and e-buses.
• Extended in phases until 2024 to accommodate growing EV demand.

Challenges Faced:

• Misuse of subsidies by OEMs using imported parts while claiming local incentives.
• Uneven adoption across states due to lack of harmonised execution.
• Delays in e-bus procurement through government contracts.

What Is the PM E-Drive Scheme?

Announced in September 2024 and active from October 1, 2024, to March 31, 2026, the PM E-Drive Scheme is designed to correct the inefficiencies of FAME II and expand the scope of EV adoption with better targeting.

Launch & Allocation

• Total Outlay: ₹10,900 crore over two years.
• Focus: Two-wheelers, three-wheelers, electric ambulances, trucks, and buses—not four-wheelers.
• Implementation Agency: Ministry of Heavy Industries (MHI) with CESL and state agencies.

Key Objectives

• Incentivise mass adoption of affordable EVs (especially 2Ws, 3Ws).
• Scale public transport electrification via e-buses.
• Enhance charging infrastructure nationwide.
• Strengthen local EV manufacturing via Phased Manufacturing Programme (PMP).

Differences Between FAME II and PM E-Drive

The PM E-Drive scheme clearly prioritises public transport electrification and affordable mass EV mobility, unlike FAME II’s broader, less focused incentives.

PM E-Drive for Vehicle manufacturers/OEMs:

Only Vehicle manufacturers/OEMs registered with the Ministry of Heavy Industries and listed on the PM E-Drive portal are eligible to offer subsidised vehicles. They must ensure that every model complies with specifications such as advanced battery technology, price thresholds, performance benchmarks, and vehicle warranties. Furthermore, the vehicles must be accompanied by comprehensive after-sales support, including service centres and battery replacement provisions.

Vehicle manufacturers/OEMs are required to undergo Conformity of Production (COP) testing every six months to ensure that the approved standards are being consistently met during mass production. Failure to comply can result in delisting from the programme and ineligibility for future reimbursements. The government has also made it mandatory for all vehicles to be registered under CMVR within the scheme’s duration to qualify for EV subsidy claims.

Shimnit supports Vehicle manufacturers/OEMs in managing this complex compliance ecosystem. From preparing homologation documents to tracking e-Voucher submissions and coordinating with government systems for reimbursement, Shimnit acts as a strategic compliance partner for EV manufacturers looking to scale responsibly under the PM E-Drive framework.

Ready to Comply with PM E-Drive? Contact Shimnit

Charging Infrastructure and Testing Support Under PM E-Drive

To overcome the slow rollout seen under FAME II, the PM E-Drive Scheme allocates ₹2,000 crore for a robust charging network. This includes 22,100 fast chargers for four-wheelers, 1,800 for e-buses, and 48,400 chargers for two- and three-wheelers across high-EV-density cities and highways. Additionally, ₹780 crore is dedicated to upgrading government testing labs to enhance EV safety, quality, and compliance across the industry.

Supported Vehicle Categories: Focused on Public and Commercial Use

Unlike FAME II, which also supported private-use four-wheelers, the PM E-Drive scheme has narrowed its focus to categories that maximise public and commercial utility. The key segments include:

• Electric Two-Wheelers (e-2Ws): Around 24.79 lakh vehicles are expected to benefit from the scheme. Both private and commercial vehicles can apply, as long as they meet the required battery specifications and fall within the approved price range.
• Electric Three-Wheelers (e-3Ws): The scheme aims to incentivise around 3.2 lakh vehicles, especially in the L5 category, used for last-mile delivery and shared transport.
• Electric Ambulances: A budget of ₹500 crore has been allocated for advanced e-ambulances. Eligibility norms are being developed in consultation with MoHFW and MoRTH.
• Electric Trucks: Another ₹500 crore is set aside for e-trucks, available only against valid vehicle scrapping certificates issued by MoRTH-approved centres.
• Electric Buses: A total of ₹4,391 crore will fund the deployment of 14,028 e-buses across nine high-density cities through CESL-managed demand aggregation. These buses must replace existing STU vehicles to qualify.

As new rules, technologies, and timelines, lack of awareness can cause both buyers and manufacturers to lose out. Vehicle Manufacturers/OEMs must stay on top of evolving requirements and submit timely documentation to ensure uninterrupted participation.

Shimnit plays a vital role here – by bridging the gap between government regulation and market execution. Whether it’s helping buyers understand their subsidy rights or helping Vehicle manufacturers/OEMs digitise their documentation and compliance processes, Shimnit simplifies what could otherwise be a highly bureaucratic journey.

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