Finance Ministry makes EVs the default choice for government staff cars

What the order actually changes

The Department of Expenditure, under the Ministry of Finance, issued office memorandum F. No. 16(17)/E.Coord/2025 on 10 November 2026. It applies to every ministry and department of the central government and takes effect immediately.

The core instruction is simple. When a ministry's existing staff car is due for condemnation or replacement, it must ordinarily buy an electric vehicle instead of another petrol, diesel or hybrid car. The order calls EVs the "default and preferred choice" for this kind of procurement. A department that still wants a conventional car has to send a justified proposal to the Department of Expenditure for a case by case relaxation, and that proposal needs the approval of the ministry's own Secretary and the concurrence of its Financial Adviser before it even leaves the building.

Alongside the mandate, the order resets the price ceiling that governs these purchases. The Net Dealer Price, the pre tax price a dealer charges before registration and GST, is now capped at ₹20 lakh for an electric staff car against ₹10 lakh for a petrol, diesel or hybrid one. The order supersedes an earlier memorandum from 1 September 2022 and says the new ceilings reflect "prevailing market prices" and "vehicle lifecycle costs."

Why the ceiling gap matters more than the mandate

A rule that says "prefer an EV" is easy to write and easy to ignore if the EV costs more than the budget allows. By setting the EV ceiling twice as high as the ICE one, the order removes that excuse for a wide band of government buying. An NDP of ₹20 lakh, before tax, covers most mid size electric sedans and SUVs sold in India today, not just entry level hatchbacks. A department that could previously argue an EV was unaffordable within a ₹10 lakh NDP limit for a conventional car no longer has that argument available at the EV ceiling.

This is a demand side lever, not a subsidy. Unlike PM E-DRIVE, which pays an incentive per vehicle, this order works by controlling what the government itself is allowed to buy. Central ministries and their attached offices run thousands of staff cars, and even a slow replacement cycle adds up to a real, non trivial order book for carmakers selling electric sedans and SUVs in that price band.

The Karnataka and Bengaluru angle

The order covers central government ministries and departments, not state governments, so it does not by itself change what the Karnataka Secretariat or BBMP buy for their own staff cars. Karnataka's state fleet purchases are governed separately, under the state's own rules and its 2017 EV and energy storage policy.

What it does change is the demand picture that Bengaluru based and Bengaluru selling carmakers compete for. Any central government office, PSU or regional establishment in Karnataka that still runs on staff cars will now be shopping from the electric side of the lot when a car comes up for replacement, at NDP levels up to ₹20 lakh. For a state that already pushes EV adoption through its own incentives, a central rule that nudges every ministry office toward an electric staff car adds one more buyer to the same pool.

Sources

• Dept of Expenditure Revised Guidelines on Procurement and Hiring of Staff Cars
• Procurement and hiring of staff cars by Ministries/Departments, Staffnews.in
• EVs now default for government staff cars, The Hans India