The Union cabinet on Wednesday approved the PM E-Drive Scheme with an outlay of ₹10,900 crore for two years replacing the flagship FAME programme that ran for nine years till March.

The scheme will support 24.79 lakh electric two-wheelers, 3.16 lakh e-three-wheelers and 14,028 e-buses. The scheme will support 88,500 charging sites, information and broadcasting minister Ashwini Vaishnaw said.

The new scheme offers subsidies and demand incentives worth ₹3,679 crore to promote not only two-, three-wheelers and buses but also e-ambulances, e-trucks and other emerging electric vehicles (EVs).

A sum of ₹4,391 crore has also been provided for the procurement of 14,028 e-buses by state transport undertakings and public transport agencies.

Besides, ₹500 crore has been earmarked for the deployment of e-ambulances.

A sum of ₹500 crore has been provided for incentivising the adoption of e-trucks.

While allocating buses to cities/states, first preference shall be given to buses being procured after scrapping old buses. The incentives for trucks will be given to those who have a scrapping certificate.

The faster adoption and manufacturing of (Hybrid and) electric vehicle (FAME) scheme was launched in April 2015.

The E-Drive scheme proposes the installation of 22,100 fast chargers for electric four-wheelers, 1,800 fast chargers for electric buses and 48,400 fast chargers for electric two- and three-wheelers with an outlay of ₹2,000 crore.

Vaishnaw said the ministry of heavy industries is introducing e-vouchers for EV buyers to avail themselves demand incentives under the scheme.

Electric vehicle adoption in India is at its nascent stage with overall penetration close to 7 per cent. Two-wheelers accounted for 56 per cent of the electric vehicle sales in the last financial year, while three-wheelers constituted 38 per cent.

Affordability and limited charging infrastructure have been the major hurdles in the faster adoption of electric vehicles.

The subsidies given on the purchase of electric vehicles are instrumental in driving the early-stage adoption of electric vehicles as incentives help in reducing the upfront cost of the vehicle.

Society of Indian Automobile Manufacturers (SIAM) president Shailesh Chandra said this was a progressive by the government .