Modi government may extend EV incentives for all vehicles
What's the story
The Indian government is planning to extend the benefits of the PM E-DRIVE scheme for electric two-wheelers (e-2Ws) and three-wheelers (e-3Ws) beyond March 31, 2026. The move comes as a result of unspent funds in these segments. The Ministry of Heavy Industries has approached the Finance Ministry for approval to continue this initiative, sources told CNBC-TV18.
Fund utilization
Unspent funds prompt proposed extension
A portion of the funds allocated for electric two- and three-wheelers under the PM E-DRIVE scheme remains unutilized. This has prompted the government to consider extending the deadline, in a bid to promote wider adoption and ensure full utilization of this initiative. The total budget for this scheme is ₹10,900 crore.
Targeted extension
Extension to focus on high-volume segments
The proposed extension is likely to focus on high-volume segments such as e-2Ws, e-rickshaws, and e-carts. These have witnessed strong demand but still need policy support for sustainable growth. Other components of the PM E-DRIVE scheme like electric buses and charging infrastructure are already valid till March 2028 and aren't part of this proposed extension.
Expiration alert
Timely decision critical for industry continuity
The incentives for e-2Ws and e-3Ws under the PM E-DRIVE scheme are set to expire on March 31, 2026. This makes a timely decision important for industry continuity and demand momentum. The move comes after a Parliamentary Standing Committee review flagged big divergences between Budget Estimates (BEs) and Revised Estimates (REs) in major automotive schemes, with huge cuts observed at the RE stage for FY26.