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No Subsidy For Electric Two Wheelers From 2026 Fiscal Year
The Government of India plans to end the subsidy scheme for the purchase of electric vehicles. The PM e-Drive scheme offers incentives for Electric two-wheelers, three-wheelers, and commercial/ public transport. Now, the government has no plans to extend these incentives further, excluding electric buses and trucks.
The e-two-wheeler and three-wheeler buyers get benefits such as Purchase incentives, Coupons, interest subventions, Exemption from Road tax and registration fee, income tax benefit, and scrapping incentives.
PMeDRIVE Scheme to end soon
According to the Economic Times report, the PM eDRIVE Scheme will end this fiscal year, and there will be no subsidy for electric two-wheelers and three-wheelers thereafter. But the subsidy for electric buses and trucks will continue.
The sales of electric two-wheelers haven't even crossed the double-digit mark compared with electric 3-wheelers, which now have more than 30% penetration in the segment. Cutting subsidies after 25- 30% penetration is ok, but electric two-wheelers are facing tough competition in a well-established two-wheeler market dominated by ICE vehicles.
India plans to achieve 30% EV sales by 2030, but with the current rate, it will not be possible. As per the PM eDRIVE scheme, the e2Wheelers subsidy was 2,500 per kWh and 5000 rupees per vehicle. For e3 Wheelers, it was 2,500 per kWh and 25000 rupees per vehicle.
No More Subsidy for Electric Two Wheelers
In the last 10 years, the government has spent 40,000 crores on electric vehicles, yet only 7.6% of annual sales are coming from EVs. The funds for this electric subsidy scheme are limited, and it will end this fiscal year and won't be extended for 2026-2027.
Many OEMs would be disappointed with this decision, as competing against ICE vehicles without the subsidy is quite hard. OEMs have to give discounts and benefits on their own to push EV sales. But India's EV charging infrastructure in urban areas has drastically increased, and more people are now aware of electric vehicles and their benefits.
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