The central government has reinstated subsidies for the sale of electric cargo three-wheelers (e-3Ws) in the L5 category following reports that these incentives had been halted after the achievement of PM E-DRIVE targets.

According to officials familiar with the decision, subsidies for eligible e-3Ws (L5) will now be provided at a reduced rate of Rs. 2,500 (US$ 30) per kilowatt (kW), with a cap of Rs. 25,000 per vehicle. This represents a 50% reduction from the original subsidy offered by the Ministry of Heavy Industries (MHI) to promote the production of locally manufactured e-3Ws (L5).

A reduction in subsidies for electric two-wheelers (e-2Ws) is also anticipated once PM E-DRIVE targets for this category are expected to be reached by February 2025.

On 18th November 2024, media reports suggested that subsidies for new e-3W (L5) sales might be discontinued after the PM E-DRIVE targets for the current fiscal year were achieved within weeks of the scheme's launch. Consequently, sales of electric two- and three-wheelers are nearing the PM E-DRIVE targets for the 2024Â?25 fiscal year. Similar to its predecessor, the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, PM E-DRIVE seeks to promote the sale of locally produced electric vehicles (EVs).

According to a senior official, "The incentive, initially applicable to 124,846 e-3Ws (L5) for the financial year 2025Â?26 starting from April 2025, is now available from 8th November 2024."

Sales reported under the previous Electric Mobility Promotion Scheme 2024 (EMPS 2024) have also been integrated into PM E-DRIVE, which has been in effect since October 2024.

An earlier MHI order stated: "A total of 80,546 e-3Ws (L5) will be incentivised during the current financial year 2024Â?25. Vehicles sold and registered beyond the target will not be eligible for incentives in FY 2024Â?25."

Sales of e-3Ws (L5) have already surpassed the PM E-DRIVE target for this fiscal year, despite more than four months remaining. For e-2Ws, the scheme aims to subsidise 1 million units, of which a significant proportion has already been sold.

However, sales of smaller e-3W vehicles, including e-rickshaws and e-carts, remain considerably below the target.

PM E-DRIVE serves as the central government's flagship EV subsidy programme, offering demand incentives for e-2Ws, e-3Ws, e-ambulances, e-trucks, and other emerging EV categories. Furthermore, the scheme provides grants for the creation of capital assets, such as e-buses, the establishment of charging station networks, and the modernisation of MHI testing facilities.

The initiative, launched for a two-year period concluding in the next fiscal year, aims to subsidise the sale of 1.42 million e-2Ws, 125,000 L5 e-3Ws, and 67,000 e-rickshaws and e-carts during the financial year 2025Â?26.