The Ministry of Heavy Industries has extended subsidies for electric two-wheelers till 31 July 2026, and for electric rikshaw and electric carts till 31 March 2028 under the Prime Minister's Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme, according to a notification dated 27 March 2026.
It added that the target for e-two wheelers (e2w) has been scaled to 24.8 lakh up from 14 lakh; and the goal for e-rickshaws and e-carts has been raised to over 39,000 from the previous 36,400+.
Industry sought extension of scheme
In January, e2w majors Bajaj Auto, Hero MotoCorp and TVS Motor Co., made formal representation to the ministry via the Society of Indian Automobile Manufacturers (SIAM) seeking extension of the subsidies for manufacture of e2ws. They argued that a fourth of the vehicles targeted are yet to claim incentives and allocated funds should not be unutilised, sources told Mint.
Ather Energy, Bajaj Auto, Hero MotoCorp, Honda Motorcycle, MHI, Ola Electric, Scooter India, SIAM, and TVS Motor did not respond to queries sent by Mint at the time.
It added that the industry’s call for more subsidies also comes amid fears that EV penetration has slowed after the government in September cut goods and services tax (GST) on internal combustion engine (ICE) vehicles.
Notably, analysts and industry executives feel removal of subsidies under PM E-Drive can lead to price hikes of up to ₹5,000 for e2ws. At least two analysts predicted around 300-basis-point impact on company margins that could be passed on to customers or absorbed and thus impact profitability. India's automobile sector, especially two-wheelers, is seen very sensitive to price hikes.
About PM E-DRIVE Scheme
The PM E-DRIVE Scheme provides outlay of ₹1,772 crore for electric vehicles (EVs) of which Es 1,259.91 crore expenditure was approved for e2ws, as per estimates. The Scheme gives manufacturers a ₹5,000-incentive on sale of each EV, which on an average, is about 5% of an e-two wheeler’s price.
Official estimates peg the total number of e2ws sold till date at 10 lakh, while e-three-wheelers have exceeded targets at over 1.62 lakh sold against target of 1.59 lakh. For e-rickshaws and e-carts, less than 10% of the goal has been achieved.
The government launched the ₹10,900 crore PM E-Drive scheme in September 2024 to incentivise two-wheelers, three-wheelers, electric trucks and buses, as well as charging infrastructure. While the scheme was slated to run till March 2026, it was extended till March 2028 for electric trucks and buses.
Comprising over 75% of India's total vehicle sales, e2ws are crucial for India's push to cut emissions and increase adoption of clean fuel vehicles in the two-wheeler segment.
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