PM E-DRIVE scheme: Centre targets 5-day turnaround for EV subsidy claims

Under the PM E-Drive initiative, MHI offers a subsidy of Rs 5,000 per kWh of battery capacity for e2Ws, capped at Rs 10,000 per vehicle for FY25

The Ministry of Heavy Industries (MHI) is working to expedite the disbursement process for electric vehicle (EV) subsidies under the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) initiative.

 

It aims to reduce the processing time from the current 40 days to just five. This change comes in response to a backlog of claims, particularly for electric two-wheelers (e2Ws), a senior government official said.

 

Currently, there are 126,000 claims in process for 2024-25, with 109,000 of these claims related to e2Ws, of a total of 893,000 claims. The subsidy claims submitted for e2Ws through the Public Financial Management System (PFMS) portal amount to 793,000, while the remainder pertains to electric three-wheelers (e3Ws), including electric rickshaws, electric carts, and L5 vehicles (e3Ws with a maximum speed exceeding 25 kilometres per hour and motor power exceeding 0.25 kilowatt).

 

Under the PM E-DRIVE initiative, MHI offers a subsidy of ₹5,000 per kilowatt-hour (kWh) of battery capacity for e2Ws, capped at ₹10,000 per vehicle for 2024-25 (FY25). For 2025-26, this amount will be ₹2,500 per kWh, capped at ₹5,000 per vehicle.

 

The target for selling EVs — specifically e2Ws and e3Ws — under PM E-DRIVE for FY25 was set at 1.25 million units, and the actual sales were 1.07 million units.

 

Delays in disbursing subsidy claims, especially for e2Ws, can be attributed to complications with face authentication, according to analysts and industry experts.

 

“Two-wheelers are primarily purchased by individuals rather than commercial fleet or original equipment manufacturers. Buyers may look significantly different from their Aadhaar photos, which could have been taken years earlier. Changes in appearance can lead to issues with identity verification for EV buyers,” explained Shyamasis Das, a Fellow in energy, resources, and sustainability at the Centre for Social and Economic Progress (CSEP).

 

Dealers are equipped with cameras to capture the buyer’s photo, which is then sent to an online system established after the offline process in Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India Phase-II (FAME-II). However, when authenticating through Aadhaar, mismatches often occur due to outdated photos, leading to delays in subsidy disbursement.

 

The PM E-DRIVE scheme requires buyers to complete Aadhaar eKYC using face authentication via the PM E-DRIVE application or portal to generate an electronic voucher (e-voucher). This process verifies the identity of the beneficiary and helps prevent fraudulent claims. After successful face authentication, the system generates an e-voucher with a unique identification number, which is essential for claiming the subsidy.

 

“After a subsidy claim is submitted on the Ministry of Road Transport and Highways’ Vahan portal, the Industrial Finance Corporation of India (IFCI) typically takes about 40 days to forward it to MHI. We plan to reduce this time to just five days. We have set targets for IFCI, and once the integration is complete, they will provide the claims to MHI within a week. Following that, we will process it on the PFMS and disburse the subsidy within another week,” the official quoted earlier said.

 

“We are also developing software to further address the delay, and we expect it to be integrated within a few months,” the official added.

 

According to CSEP’s Das, the face authentication process must be clearly outlined for consumers. If buyers understand that it is a visual-based authentication system, they can visit the nearest Aadhaar centre to update their photo before approaching a dealer.