Introduction: EV Subsidies in India 2025
Electric Vehicles (EVs) are the future of mobility in India. However, the biggest barrier for most buyers is price. Compared to petrol or diesel cars, EVs often cost 20–30% more upfront, even though they save money on fuel and maintenance in the long run.
This is where the Government of India steps in. Through various subsidies, incentives, and tax benefits, EVs become more affordable for middle-class buyers. In fact, with the right policy support, you can save anywhere between ₹50,000 to ₹2.5 lakh on your EV purchase.
Let’s break down all government incentives & subsidies for EV buyers in India in 2025 from national-level schemes like FAME II to state-wise benefits.
Table of Contents
National-Level EV Incentives in India
The Indian government has rolled out a series of EV-friendly policies to encourage adoption. These include:
FAME II Scheme (Faster Adoption and Manufacturing of Hybrid and EVs)
- Budget: ₹10,000 crore allocated till 31 March 2024 (extended in modified form for 2025).
- Focus: Supporting EV manufacturing, charging infra, and buyer subsidies.
- Who Benefits: Buyers of electric two-wheelers, three-wheelers, and four-wheelers.
- How Much Subsidy?
- 2-Wheelers: Up to ₹15,000 per kWh of battery capacity.
- 3-Wheelers: Up to ₹10,000 per kWh.
- 4-Wheelers (Commercial): Up to ₹10,000 per kWh with a cap of ₹1.5 lakh.
Example: If you buy a Tata Nexon EV (40.5kWh battery), you may get a subsidy of nearly ₹1.5 lakh.
GST Reduction on EVs
- EVs attract only 5% GST, compared to 28% GST + cess on petrol/diesel cars.
- This makes EVs 20–25% cheaper than they would have been with normal taxation.
Income Tax Benefits (Section 80EEB)
- EV buyers who take a loan can claim tax deductions up to ₹1.5 lakh on interest paid.
- Applies only to individual buyers, not companies.
Example: If you pay ₹1.8 lakh interest over the loan term, ₹1.5 lakh of that is tax-deductible.
Road Tax & Registration Waivers
- Many states offer zero road tax and free registration for EVs.
- This saves buyers anywhere between ₹40,000 to ₹1 lakh depending on the car’s price.
State-Wise EV Subsidies (2025 Updates)
India’s states have their own EV policies, often more aggressive than the national scheme.
Maharashtra
- Subsidy: ₹5,000 per kWh of battery (up to ₹1.5 lakh).
- Additional Benefit: Early bird incentives for first 10,000 buyers.
- Road Tax: 100% exemption.
Delhi
- Subsidy: ₹5,000 per kWh (up to ₹1.5 lakh for cars).
- Special Perk: Waiver on registration fees.
- Focus: Reducing air pollution, making EVs mainstream.
Gujarat
- Subsidy: ₹10,000 per kWh (up to ₹1.5 lakh).
- Extra: Incentives for manufacturers setting up plants in Gujarat.
Karnataka
- Subsidy: Mainly infrastructure-focused. Buyers get road tax exemption.
- Special: Bengaluru gets 1,000+ new public charging stations by 2025.
Tamil Nadu
- Subsidy: Road tax and registration fee waivers.
- Focus: Large EV manufacturing hub with Ola, Ather, BYD factories.
Telangana
- Subsidy: Up to ₹1.5 lakh per EV.
- Extra: Waiver of road tax and registration charges.
Other states like Kerala, Rajasthan, Assam, and Andhra Pradesh also offer varying subsidies.
How Much Can You Actually Save?
Let’s take Tata Nexon EV Long Range (₹17 lakh ex-showroom) as an example:
- Central FAME II Subsidy: ₹1.5 lakh
- Delhi Govt Subsidy: ₹1.5 lakh
- GST Benefit: Already 5% (saves ~₹2.5 lakh compared to petrol SUV taxes)
- Road Tax Waiver: ₹70,000
- Registration Waiver: ₹25,000
Total Savings: Around ₹6–7 lakh on a single EV purchase!
Corporate & Fleet EV Benefits
- Companies adopting EV fleets get accelerated depreciation (40%) on EVs.
- Lower income tax due to reduced profit on paper.
- Fleet owners benefit from bulk FAME II subsidies.
Upcoming EV Policies in 2025
The govt is drafting FAME III (expected late 2025) with:
- Focus on longer-range EVs and commercial vehicles.
- More support for charging infra.
- Expanded scope to include hydrogen and hybrid vehicles.
Challenges with EV Subsidies in India 2025
- Subsidy Delays: Many buyers complain of slow reimbursement.
- Policy Expiry: Some state incentives end in 2025 unless extended.
- Awareness Gap: Many buyers don’t know they can claim subsidies.
- Focus on Commercial EVs: Private buyers may get less support going forward.
How to Claim EV Subsidies in 2025
- Step 1: Check if your EV model is eligible under FAME II (official govt site).
- Step 2: Dealer applies subsidy directly (price reduced at invoice).
- Step 3: For state subsidy, apply via your state’s EV portal.
- Step 4: For tax benefit (80EEB), claim during ITR filing.
FAQs: EV Subsidies in India 2025
Q1: Can I claim both central and state EV subsidies?
Yes, buyers can claim both simultaneously if they meet eligibility.
Q2: Do second-hand EVs get subsidies?
No, subsidies apply only to new EV purchases.
Q3: Is FAME II subsidy valid in 2025?
Yes, but it’s being phased out slowly; FAME III will likely replace it later in 2025.
Q4: Do luxury EVs like BMW iX get subsidies?
No, subsidies mostly apply to affordable EVs (<₹20 lakh).
Q5: How can businesses benefit from EV adoption?
Companies get accelerated depreciation + lower running cost savings.
Conclusion: EV Subsidies in India 2025
Buying an EV in India is not just about going green, it’s also about saving money. Thanks to government subsidies, you can cut costs by lakhs, making EVs cheaper than many petrol/diesel cars in the long run.
From national incentives like FAME II & GST reduction to state-level subsidies in Delhi, Maharashtra, and Gujarat, 2025 offers the best time ever to switch to EVs. If you’re planning to buy, check your state’s EV policy now and you may be shocked at how much you can save.
