 "Centre pulls subsidy as electric three-wheelers hit target under PM e-Drive")
The Centre has decided to withdraw subsidies for electric three-wheelers after achieving its target under the PM e-Drive scheme, The Times of India reported. The government had aimed to support 290,000 electric three-wheelers, a goal that has now reportedly been met.
The report quoted officials as saying that the move reflects the maturity of the segment, with electric vehicles making up a significant share of three-wheeler sales.
Electric vehicle penetration in the three-wheeler segment is estimated at around 32 per cent, which aligns with the Centre’s original target of 20-30 per cent. With this milestone achieved, the government plans to step back and allow states to take the lead in further promotion.
The situation is different in the electric two-wheeler segment, where EV penetration stands at about 7.5 per cent. Given the lower adoption rate, government support for electric two-wheelers may continue into the next financial year.
While electric two-wheelers may need further policy support, the Centre is increasingly shifting responsibility to states. Several states are considering their own incentive schemes to boost adoption.
No demand for electric buses, trucks
Under the PM e-Drive scheme, demand for electric buses and trucks has not picked up yet, as many of these vehicles are still in the testing phase.
The government has planned support for 14,000 electric buses and 5,643 electric trucks under the scheme. However, industry executives say charging infrastructure remains a key challenge and will require participation from private service providers, the report said.
3-W industry eyes around 7% growth in FY26
India’s three-wheeler market is expected to post mid-single digit growth in the second half of FY26, helped by strong festival sales in October. This momentum follows steady demand seen in the first half of the financial year.
Industry analysts say demand trends suggest that growth in the second half will mirror the first half, at around 5-6 per cent. Overall growth for FY26 is projected at about 7 per cent, supported by consistent month-on-month demand.
According to the Society of Indian Automobile Manufacturers (SIAM), wholesale dispatches in the first half of FY26 rose 5.5 per cent year-on-year to 394,450 units, driven largely by strong sales in July.
PM E-DRIVE delivers over 1.13 million EVs in first year
The PM E-DRIVE scheme delivered 1.13 million electric vehicles in its first year, despite offering lower per-vehicle subsidies compared to the earlier FAME II scheme, according to a study by the Council on Energy, Environment and Water’s Green Finance Centre (CEEW-GFC).
Even after reducing the per-unit incentive to ₹5,000 per kWh -- about half of what was offered under FAME II -- PM E-DRIVE enabled annual EV volumes that were 3.4 times higher than those under the previous scheme.
India’s automotive sector contributes 7.1 per cent to GDP and supports more than 30 million jobs. EV sales have grown sharply over the years, rising from just over 2,000 units in FY15 to around 1.96 million units in FY25. Overall EV penetration has now reached 7.49 per cent.