EV makers that source components locally will receive financial support under the scheme sans any domestic value addition mandate, they said.
Only local assembly of parts to make an EV component will be mandatory for claiming eligibility under the scheme, but suppliers will be allowed to import parts, officials said. "There will be a PMP to ensure local manufacturing of EVs. Companies seeking subsidies under the scheme will be given six months to comply with the PMP from the date of scheme notification," a senior government official told ET on condition of anonymity.
These companies will need to ensure assembly of components in India, the official said.
The financial support for electric two-wheelers will be halved to INR 5,000 per vehicle from 2025-26, they said.
For electric three-wheelers, the subsidy will be capped at INR 25,000 per vehicle.
Another official said manufacturing facilities of component suppliers will be subject to checks to prevent subsidy misuse.
The new scheme has a biannual inspection clause built in to keep a check on EV makers.
The Centre approved the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme for two years with a INR 10,900 crore outlay, replacing the Faster Adoption and Manufacture of Hybrid and Electric Vehicles (FAME) scheme in place since 2015.
The official said the PM E-DRIVE will also subsume the Electric Mobility Promotion Scheme 2024 which was announced to subsidise EVs during the 2024 general election. PM E-DRIVE, like its predecessor FAME, is aimed at subsidising locally manufactured vehicles.
But the earlier iteration was marred with instances of companies selling largely imported vehicles and wrongly availing subsidies. The government has attempted to address these concerns in the new scheme through stringent checks.
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