The PM E-DRIVE was launched in September 2024 with an outlay of ₹10,900 crore for two years till Macrh 31, 2026
The Budget 2026-27 has cut the allocation for Prime Minister Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme by 62.5 per cent to ₹1,500 crore under Budget Estimate (BE) 2026-27 as compared with ₹4,000 crore in the BE 2025-26.
However, it has increased by more than 15 per cent from the Revised Estimate (RE) of ₹1,300 crore in FY2025-26, the Budget documents have indicated.
The PM E-DRIVE was launched in September 2024 with an outlay of ₹10,900 crore for two years till Macrh 31, 2026, with an aim to boost adoption of electric vehicles (EVs) in the country.
The Scheme was launched by the Ministry of Heavy Industries and subsumed with Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME-II) scheme to support 28,26,634 units of EVs in different categories including e-2 Wheelers, e-3 Wheelers, e-Buses, e-Ambulances, and e-Trucks.
Meanwhile, for the Production Linked Incentive (PLI) Scheme for automobiles and auto components, the BE 2026-27 has been increased by more than 110 per cent to ₹5,940 crore as compared with BE of ₹2,819 crore in FY2025-26.
As per the Budget documents, it has been also increased by 184 per cent of Revised Estimate of ₹2,091 crore in FY2025-26.
4,000 e-Buses
Finance Minister Nirmala Sitharaman has also announced allocation of 4,000 e-Buses for the Purvodaya States that would also help the industry.
“The higher Auto PLI allocation for FY27, customs duty exemptions on capital goods for lithium-ion cell manufacturing, and increased outlay under the PM E-DRIVE scheme reflect the government’s continued commitment to catalysing the EV ecosystem,” Shailesh Chandra, Managing Director and Chief Executive Officer, Tata Motors Passenger Vehicles, said.
According to Harshavardhan Chitale, CEO, Hero MotoCorp the Budget’s continued support for the electric mobility ecosystem, including charging infrastructure, duty relief for battery manufacturing, and a focus on building rare earth mineral corridors would accelerate the transition to clean mobility.
“Together, these measures can accelerate the transition to clean mobility and make sustainable transportation a mainstream choice for millions of Indians,” he said.
“The Union Budget 2026-27 strikes a constructive and forward-looking note for India’s automotive, manufacturing, and electric mobility ecosystem, balancing near-term demand support with longer-term supply-side reforms. It builds on the momentum and support from last year while reinforcing investor confidence,” Rahul Mishra, Partner (Automotive) at Bain & Company, said.
Published on February 1, 2026
