PM E-Drive subsidy for electric two-wheelers extended till FY28
What's the story
The Indian government has decided to extend the subsidies for electric two-wheelers under the PM E-Drive scheme till FY28. The decision comes after a Rajya Sabha standing committee urged the heavy industries ministry to expedite this move. The allocation for these subsidies has also been increased by nearly ₹1,000 crore, according to a notification.
Enhanced benefits
Subsidy allocation increased to ₹2,767cr
The government has increased the subsidy allocation for electric two-wheelers to ₹2,767 crore from ₹1,772 crore till FY28.
The number of vehicles eligible for this subsidy has also been increased to 4.57 million from over 2.4 million.
The total outlay of the scheme has been raised to ₹11,900 crore from ₹10,900 crore.
Following the announcement, Ather Energy shares jumped 4.2% to ₹1,527.40, while Ola Electric stocks rose 1.2% to ₹39.7 apiece.
Scheme details
What about the subsidy rate?
The subsidy rate under the PM E-Drive scheme will remain at ₹2,500 per kWh of battery capacity, with a cap of ₹5,000 per electric two-wheeler.
The last date for claiming this subsidy has been extended to December 31, 2027.
This extension is expected to give electric two-wheeler manufacturers more policy visibility as their segment continues to expand.
Market impact
Electric 2-wheelers are gaining popularity
Data from Vahan portal shows that electric two-wheeler sales have increased to 1.46 million in FY26 from 252,787 in FY22.
This is a stark contrast to the decline in petrol two-wheeler sales during the same period.
The shift to electric two-wheelers could also help reduce India's dependence on petrol, as two-wheelers consume a major chunk of the fuel sold in India.