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India is preparing to roll out a fresh round of financial support for electric two-wheelers as the flagship PM E-Drive scheme approaches its scheduled conclusion, in a move aimed at sustaining momentum in clean mobility while reducing dependence on imported crude oil, Mint reported on Monday, citing people aware of the development.
According to the report, the Ministry of Heavy Industries is planning to seek additional budgetary allocation to extend subsidies for electric two-wheelers under the PM E-Drive programme. The discussions come amid a broader government review of clean transport incentives as New Delhi recalibrates its support framework to accelerate electric vehicle adoption without straining fiscal resources.
The Rs 10,900 crore PM E-Drive scheme, launched in 2024, had initially earmarked Rs 1,772 crore specifically for subsidising electric two-wheelers until the end of FY26. However, slower-than-anticipated sales momentum prompted an extension of the programme until the end of July. Officials are now considering a further extension backed by fresh funding, the report said.
“A policy change is indeed being worked out. The amount of funds, however, is yet to be decided,” the report said.
The scheme had set a target of supporting 2.47 million electric two-wheelers. As of 24 May, about 2.35 million vehicles had already been subsidised under the programme, according to the official dashboard, indicating that the initiative is close to achieving its original objective.
Under the current structure, incentives are provided at Rs 5,000 per kilowatt-hour of battery capacity in the first year, tapering to Rs 2,500 in the second year, reflecting a gradual reduction in government support as the market matures.
The extension has been under consideration for the past two months as part of a wider review of central incentive schemes linked to electric mobility. The review is aimed at identifying programmes that can be continued or expanded based on demand trends and available fiscal space.
The renewed push comes against the backdrop of robust growth in the electric two-wheeler segment. Sales have risen from 252,787 units in FY22 to about 1.46 million in FY26, according to registration and government data. In contrast, petrol two-wheeler sales have softened, declining from about 13.2 million units to nearly 11 million units over the same period.
Any expansion of the scheme would also require a recalibration of budgetary priorities. The FY27 allocation for PM E-Drive currently stands at Rs 1,500 crore, originally intended for electric buses, trucks and charging infrastructure, as earlier subsidies for two-wheelers and L5 three-wheelers were expected to wind down.
The proposed policy shift underscores New Delhi’s continued push to expand electric mobility in a segment that accounts for a significant share of fuel consumption, even as policymakers balance fiscal constraints with longer-term energy transition goals.
According to the report, the Ministry of Heavy Industries is planning to seek additional budgetary allocation to extend subsidies for electric two-wheelers under the PM E-Drive programme. The discussions come amid a broader government review of clean transport incentives as New Delhi recalibrates its support framework to accelerate electric vehicle adoption without straining fiscal resources.
The Rs 10,900 crore PM E-Drive scheme, launched in 2024, had initially earmarked Rs 1,772 crore specifically for subsidising electric two-wheelers until the end of FY26. However, slower-than-anticipated sales momentum prompted an extension of the programme until the end of July. Officials are now considering a further extension backed by fresh funding, the report said.
“A policy change is indeed being worked out. The amount of funds, however, is yet to be decided,” the report said.
The scheme had set a target of supporting 2.47 million electric two-wheelers. As of 24 May, about 2.35 million vehicles had already been subsidised under the programme, according to the official dashboard, indicating that the initiative is close to achieving its original objective.
Under the current structure, incentives are provided at Rs 5,000 per kilowatt-hour of battery capacity in the first year, tapering to Rs 2,500 in the second year, reflecting a gradual reduction in government support as the market matures.
The extension has been under consideration for the past two months as part of a wider review of central incentive schemes linked to electric mobility. The review is aimed at identifying programmes that can be continued or expanded based on demand trends and available fiscal space.
The renewed push comes against the backdrop of robust growth in the electric two-wheeler segment. Sales have risen from 252,787 units in FY22 to about 1.46 million in FY26, according to registration and government data. In contrast, petrol two-wheeler sales have softened, declining from about 13.2 million units to nearly 11 million units over the same period.
Any expansion of the scheme would also require a recalibration of budgetary priorities. The FY27 allocation for PM E-Drive currently stands at Rs 1,500 crore, originally intended for electric buses, trucks and charging infrastructure, as earlier subsidies for two-wheelers and L5 three-wheelers were expected to wind down.
The proposed policy shift underscores New Delhi’s continued push to expand electric mobility in a segment that accounts for a significant share of fuel consumption, even as policymakers balance fiscal constraints with longer-term energy transition goals.
