Modi government may offer more subsidies for buying electric 2-wheelers
What's the story
The Indian government is planning to increase subsidies for electric two-wheelers as part of its clean mobility initiative. The move comes under the PM E-Drive scheme and is aimed at reducing India's dependence on oil imports. The Ministry of Heavy Industries is looking for additional funds to support this plan, according to a report by Mint citing three people familiar with the matter.
Scheme details
PM e-Drive scheme budget and progress
The PM E-Drive scheme had an initial budget of ₹10,900 crore to subsidize electric two-wheelers until the end of FY26. However, this was extended until July-end after requests from the auto industry. The scheme aimed to subsidize 2.47 million electric two-wheelers. As of May 24 this year, a total of 2.35 million vehicles had already been subsidized under this initiative, Mint reported.
Policy shift
Policy changes and budgeting challenges
A policy change is reportedly in the works for the PM E-Drive scheme, although the exact amount of additional funds required is yet to be determined. If implemented, this plan could necessitate a revision in budgeting as the allocation for FY27 was only ₹1,500 crore. This comes amid rising fuel prices and crude market volatility due to ongoing geopolitical tensions in West Asia.
Market shift
EVs gaining share in shrinking auto market
Despite the broader automobile market taking a hit, electric two-wheelers are witnessing renewed traction. In the first half of May, electric two-wheeler registrations grew by 13.5% year-on-year while overall two-wheeler sales declined by 5.5%.