According to a report from Mint, Bengaluru and Hyderabad, the capital cities of the southern states of Karnataka and Telangana, have secured subsidies for 7,000 and 2,800 electric buses, respectively, under MHI’s PM E-DRIVE scheme. MHI has capped this scheme at 14,028 electric buses, leaving a remaining quota of 4,228 units.
From 1st October 2024 to 31st March 2026, MHI is allocating 109 billion Indian rupees (approximately 1.2 billion euros) under the PM E-DRIVE scheme to subsidise various types of EVs and upgrade public charging infrastructure and testing agencies. This amount covers the related administrative expenses as well. Of the 109 billion Indian rupees (approximately 1.2 billion euros) total outlay, MHI has allocated the highest amount for electric buses – 43.91 billion Indian rupees
(approximately 482 million euros). It will disburse 18,240,000,000 Indian rupees by 31st March 2025 and the remaining 25,670,000,000 Indian rupees between 1st April 2025 and 31st March 2026.
MHI is offering the electric bus subsidy exclusively to state and city transport undertakings on the operational expenditure (OPEX)/ gross cost contract (GCC) model. Initially, it is targeting nine cities with a population exceeding four million—Mumbai, Delhi, Bengaluru, Hyderabad, Ahmedabad, Chennai, Kolkata, Surat, and Pune—to deploy the subsidised electric buses. Bengaluru and Hyderabad applied in the early phase of the scheme, while other cities are yet to submit demand
certificates to MHI. Additionally, MHI may consider supporting inter-city/inter-state electric buses at a later stage.
To qualify for the subsidy under the PM E-DRIVE scheme, an electric bus must have an ex-factory price below 20 million Indian rupees (approximately 220,000 euros). MHI offers a subsidy of 10,000 Indian rupees per kWh, 20% of the cost of the model according to the price Convergence Energy Services Limited (CESL) discovers through competitive bidding, or the maximum incentive
according to the length of the model—whichever is lowest, as per the table below:
| Bus Length | Maximum Incentive |
| >6m and ≤8m | 2.0 million Indian rupees |
| >8m and ≤10m | 2.5 million Indian rupees |
| >10m and ≤12m | 3.5 million Indian rupees |
MHI releases the approved grant in four phases. It disburses 20% after the STU issues the supply order and signs an agreement with the selected bidder. Once the STU begins commercial operations, MHI will release another 30%, covering half of the approved subsidy. It provides the remaining 50% in two stages—half after six months of successful commercial operations and the rest after 18 months.
livemint.com, heavyindustries.gov.in (in Hindi, PDF), tatamotors.com
