National Electric Vehicle Policy (NEVP) and Government Subsidies for EVs: India’s Ambitious 2025 Push

The National Electric Vehicle Policy (NEVP), along with government subsidies, is reshaping India’s journey toward sustainable mobility in 2025. If you’re curious about how these policies are driving change, encouraging manufacturers, and putting electric vehicles within reach for millions, this blog dives deep into the latest developments, incentives, and real-world impact.

The NEVP: A Game-Changing Vision

India’s NEVP marks a strategic pivot aiming to transform the country into a global hub for electric vehicle manufacturing and innovation. The policy aligns with national goals—achieving net zero emissions by 2070, reducing oil imports, improving air quality, and enshrining “Make in India” as a pillar for next-gen automotive growth.

• Key Objectives:
• Attain 30% EV penetration in total vehicle sales by 2030.
• Reduce dependence on imported fuels and cut carbon emissions.
• Promote domestic manufacturing through major investment incentives.

The NEVP is not just about incentivising buyers—it’s engineered to build an entire ecosystem with supportive infrastructure, R&D, workforce development, and global investment.

Major Schemes Powering EV Adoption

A. FAME (Faster Adoption and Manufacturing of Electric Vehicles)

• FAME-I ran from 2015 to 2019, followed by FAME-II (2019–2024), each supporting direct buyer incentives and commercial transit upgrades. FAME-II alone had a swath of Rs 11,500 crore in budgetary allocation, making EVs more affordable for mass adoption.

B. PM E-DRIVE Scheme (2024–2026)

• Launched in October 2024, the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme is the new flagship, subsuming earlier FAME incentives.
• Eligibility: e-2 Wheelers (private & commercial), e-3 Wheelers (rickshaws, carts), e-ambulances, e-buses, e-trucks, and charging infra upgrades.
• Fund Support: Rs 10,900 crore targeting nearly 2.9 million vehicles and massive infrastructure expansion.
• Battery Tech: Incentives extend only to EVs with advanced batteries, pushing technology adoption.
• Example Incentives: For e-2Ws, subsidies of Rs 5,000 × battery kWh, up to 10% of ex-factory price (with Rs 1.25 crore cap for certain commercial vehicles). E-buses get up to Rs 4,391 crore in subsidies.

C. SPMEPCI (Scheme to Promote Manufacturing of Electric Passenger Cars in India)

• Approved in March 2024, this scheme fosters homegrown manufacturing, encourages global EV-makers to set up real production in India, and enables reduced import duties (from 70%+ to just 15% for qualifying CBUs).
• Investment Mandate: Global automakers must invest Rs 4,150 crore minimum, with a rising percentage of local components—25% made in India within 3 years, 50% within 5 years.
• Results: This level of commitment is positioning India as a leading destination for high-tech EV investments.

State-Wise Subsidies: Boosting Local Adoption

Beyond national incentives, Indian states offer tailored subsidies and perks:

• Delhi: Up to Rs 1.5 lakh subsidy, plus waivers for registration and road tax.
• Maharashtra: Up to Rs 2.5 lakh, with a bonus for scrapping old ICE vehicles.
• Madhya Pradesh: New 2025 policy offers up to Rs 10 lakh on select EVs.
• Gujarat & Karnataka: Up to Rs 1.5 lakh, plus permit and parking waivers.
• Other Perks: Many states provide extra benefits for commercial fleets, local manufacturing, and early-bird buyers.

Charging Infrastructure, Guidelines and Future Prospects

• The Ministry of Power rolled out new guidelines for the installation and operation of EV charging stations in September 2024, supporting rapid expansion in office complexes, cities, highways, and residential blocks.
• Charging infrastructure is a core focus, with substantial support allocated for public and private installation grants.

How to Claim Subsidies and Who Can Benefit?

• Eligibility: Most central and state subsidies require buying certified vehicles during the scheme period and choosing models with advanced batteries.
• Commercial/Fleet Priority: Commercial vehicles, public transport, and delivery fleets gain extra benefits; however, private buyers are also eligible for major subsidies and perks.

NEVP Impact: Market Shifts and Clean Mobility

• Sales Growth: EV sales jumped from 50,000 in 2016 to over 2 million units by 2024, marking sustained momentum.
• Market Attraction: India is attracting global automakers and startups, expanding job opportunities and stimulating R&D.
• Environmental Benefits: Each new EV on the road replaces a polluting petrol or diesel vehicle, directly contributing to cleaner air.

Conclusion

With NEVP, FAME, PM E-DRIVE, SPMEPCI, and strong state-level support, India is rapidly closing the gap between aspiration and reality on electric mobility. Whether you’re a consumer, manufacturer, or innovator, the scope of government subsidies and policy incentives in 2025 makes this the best time to be part of the electric revolution.

Check your local schemes, explore certified models, and watch for frequent updates—India’s electric future is accelerating.

References: Policy details and schemes are up to date as of August 2025, based on official notifications, NITI Aayog reports, and government portals.

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