India Electric Two-Wheeler Subsidy PM E-DRIVE

PM E-DRIVE strengthens India’s electric two-wheeler growth story by directly improving affordability and adding stronger compliance safeguards. Effective from 1 October 2024 to 31 March 2026, the scheme targets incentives for ~24.79 lakh e-2Ws. The demand incentive is proposed at US$55 (₹5,000) per kWh for e-2Ws/e-3Ws registered in FY 2024-25 and US$28 (₹2,500) per kWh for FY 2025-26.

PM E-DRIVE’s biggest impact on the electric two-wheeler market is faster adoption through upfront affordability, the ₹/kWh incentive helps e-2Ws compete more strongly with ICE scooters and commuter motorcycles at the point of purchase.

At the same time, the scheme is improving market discipline and buyer confidence by allowing incentives only for advanced-battery models and requiring warranty (including battery) & after-sales readiness, pushing OEMs to strengthen product quality and service networks. Finally, the parallel push to expand public charging infrastructure (including chargers for e-2W/e-3W) supports longer-term confidence and usage convenience while the FY2025-26 incentive step-down is likely to trigger OEM pricing, finance, and promotional strategies to sustain demand momentum.

As of 5 February 2026, the government has already reimbursed US$130.5 million (₹1,182.32 crore) for 14.39 lakh e-2Ws about 58% of the target volume signalling strong on-ground uptake. Adoption is also geographically concentrated, with Maharashtra (19%), Karnataka (11%), and Tamil Nadu (10%) together accounting for nearly 40% of all incentivised e-2Ws. Importantly, the release clarifies PM E-DRIVE does not offer tax exemptions to manufacturers; instead, the supply side is strengthened through PLI incentives (13–18%) and mandatory PMP localisation, aligning consumer demand growth with domestic EV component manufacturing.

Finally, PM E-DRIVE is building demand confidence through infrastructure scale targets: operational guidelines under the scheme envisage US$22 (₹2,000) crore for EV public charging, including 48,400 chargers for e-2W/e-3W (as part of a wider ~72,300 charger plan across segments), with rollout focused on high-adoption cities and selected corridors this supports the next phase where OEM “future strategies” will likely pivot to localised BOM reduction, stronger warranty/service coverage, financing-led affordability, and city/fleet penetration in top states (Maharashtra, Karnataka, Tamil Nadu, UP) that already dominate incentivised volumes.

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