Electric two-wheeler buyers can avail a maximum subsidy of up to Rs 10,000 in the first year of the PM E-DRIVE Scheme to be rolled out soon, Union Heavy Industries Minister HD Kumaraswamy said on Thursday.

Addressing a media briefing, Kumaraswamy said the subsidy under the PM E-DRIVE Scheme for electric two-wheelers has been fixed based on battery power at Rs 5,000 per kilowatt hour but the overall incentive will not exceed Rs 10,000 in the first year.

In the second year, it will be halved by Rs 2,500 per kilowatt hour, and the overall benefit will not exceed Rs 5,000.

Addressing the media, Kumaraswamy said e-rickshaw buyers can avail of subsidy benefits of Rs 25,000 in the first year and Rs 12,500 in the second year of the PM E-DRIVE scheme.

“The per kilowatt subsidy for electric two-wheelers is Rs 5,000 for the first year, and in the second year Rs 2,500, for two years, this benefit will be continued,” the minister said.

He clarified that the maximum benefit per two-wheeler will be capped at Rs 10,000 per vehicle in the first year and reduced to Rs 5,000 in the second year.

Currently, popular electric scooters from makers like Ola, TVS, Ather Energy, Hero Vida (Hero Motocorp) and Chetak Bajaj have battery capacities ranging from 2.88 kWh to 4kWh in a price range of Rs 90,000 to Rs 1.5 lakh.

For three-wheelers, including e-rickshaws, Kumaraswamy said, “In the first year, they will get (benefit of Rs 25,000), and in the second year, it will come down to Rs 12,500 per vehicle”.

For the L5 category (cargo three-wheelers), they will get a benefit of Rs 50,000 in the first year, and for the second year, it is Rs 25,000, the minister further informed.

Under the scheme, an Aadhaar authenticated e-voucher will be issued by the PM E-DRIVE portal, and it has to be duly signed by the buyer and dealer and uploaded on the portal. The buyer would also need to upload a selfie to avail of demand incentives under the scheme.

To avoid the misuse of government subsidy in the scheme, MHI Secretary Kamran Rizvi said, “We learnt many things from FAME-II. So, every six months there will be a conformity test of production, which will ensure that twice a year everything is tested”.

When asked if the EV manufacturers, who had allegedly flouted FAME II norms, would be debarred from the PM E-DRIVE, Kumaraswamy said, “How we can encourage them? We will take a decision”.

Kumaraswamy informed that subsidies/demand incentives worth Rs 3,679 crore have been provided to incentivise e-2Ws, e-3Ws, e-ambulances, e-trucks and other emerging EVs under the PM E-DRIVE Scheme. The scheme will support 24.79 lakh e-2Ws, 3.16 lakh e-3Ws, and 14,028 e-buses.

The scheme has allocated Rs 500 crore for the deployment of e-ambulances to promote its use for comfortable patient transport.

The performance and safety standards of e-ambulances will be formulated in consultation with the Ministry of Health and Family Welfare, Ministry of Road Transport and Highways and other relevant stakeholders, the minister said.

Commenting on the targeted level of EV penetration with the new scheme, Rizvi said the government is expecting 10 per cent of new annual sales in electric two-wheelers and 15 per cent of new annual sales in three-wheelers.

When asked about reasons for leaving out electric passenger vehicles used for commercial purposes under the scheme, Kumaraswamy said they attract only 5 per cent GST at present, unlike 28 per cent plus cess for internal combustion engine vehicles.

On the PM-eBus Sewa-Payment Security Mechanism (PSM), Rizvi said the government has ensured payments to electric bus operators with 38,000 e-buses with an outlay of over Rs 3,435 crore.

“If a city has contracted a particular operator to run its buses and the operator does not get timely payment, then we will make payment from PSM. Three months time is allowed (to the state to make the payment). Within three months, the state must give back the money … then (if the payment is not made) there is a provision that the (state) government’s account can be debited by the RBI”.

He said that under the PSM, payments for 12 years will be secured.

Further, he said only those states will get the PM E-BUS SEVA scheme who have signed this mandate.