Why buying an electric car in India gets you no cash subsidy now

No central scheme pays you to buy one

If you book a Tata Nexon EV, a Mahindra BE 6 or an MG Windsor this month, no central government scheme sends any money back to you or knocks anything off the invoice. The subsidy programme that paid out from PM E-DRIVE, the scheme that replaced FAME II in October 2024, does not list private electric cars among the vehicles it supports. Its own policy page names electric two wheelers, electric three wheelers, e-buses, e-trucks and e-ambulances, along with public charging infrastructure, as the categories that get a demand incentive. Passenger cars for personal use are not on that list.

This surprises a lot of first time EV buyers in India, because the earlier FAME II scheme did subsidise electric cars until it closed in March 2024. PM E-DRIVE never brought that benefit back for private four wheelers.

What actually lowers the price

The one benefit every electric car buyer gets, regardless of where you live or who makes the car, is GST. The GST Council has kept the rate on electric vehicles at 5 percent with no compensation cess, and it reaffirmed in 2025 that this 5 percent rate applies to every category of electric vehicle, from mass market hatchbacks to luxury SUVs. That is already built into the ex-showroom price the dealer quotes you, so there is nothing extra to claim here. It is simply why an EV's price looks a little less bloated by tax than a petrol or diesel car's does.

States still write cheques and waive tax, car by car

Beyond GST, what you get depends entirely on where you register the car.

Delhi's EV Policy 2026, which took effect from 1 July 2026 and runs to 31 March 2030, gives a 100 percent exemption from road tax and registration fees on any electric car priced up to ₹30 lakh ex-showroom. Cars above that price get nothing. The policy also carries a scrapping incentive of ₹1 lakh for buyers who scrap a BS4 or older vehicle and use the deposit certificate to buy a new EV priced up to ₹30 lakh within six months, limited to the first 1 lakh applicants.

Maharashtra's EV Policy, running for five years from April 2025 with a ₹1,993 crore outlay, is more generous to fleets than to individuals. It pays up to ₹2 lakh per vehicle to electric four wheelers used for transport or commercial purposes, capped at 25,000 vehicles, which mostly means taxi and fleet operators. A private buyer taking home a Hyundai Creta Electric for personal use gets none of that cash. What every EV owner in the state does get, private or commercial, is full exemption from motor vehicle tax and registration fees, plus toll free travel on the Mumbai Pune Expressway, the Mumbai Nagpur Samruddhi Mahamarg and the Mumbai Trans Harbour Link.

What this means if you are buying

Do not wait for a subsidy email or a portal voucher the way e-scooter buyers get one under PM E-DRIVE. There is none for cars. What you should actually check before booking is the state specific road tax waiver, since that is where the real saving sits, often ₹2 lakh to ₹5 lakh on a mid size EV depending on the state's road tax slab for petrol and diesel cars. Ask your dealer for the ex-showroom price with the 5 percent GST already applied, and separately confirm in writing whether your state's road tax exemption has a price cap, like Delhi's ₹30 lakh limit, because crossing it by even a few thousand rupees in optional accessories can cost you the whole waiver.

Sources

• PM E-DRIVE Scheme Guidelines
• GST Council retains 5% tax slab for all EVs
• Delhi EV Policy 2026: What's in it for cars
• New Maharashtra EV Policy 2025: car subsidies, toll waivers explained