PM EDRIVE Electric Vehicle Scheme Shows India’s EV Policy Maturity

On October 30, India’s electric mobility journey reached a defining milestone as evidence emerged that the PM EDRIVE electric vehicle scheme is delivering higher volumes with lower subsidies, signaling a structurally stronger EV market. The first year of PM EDRIVE recorded large-scale electric vehicle adoption while cutting per-vehicle incentives nearly in half compared to earlier programs, without slowing demand.
PM EDRIVE Electric Vehicle Scheme Outperforms FAME II
The PM EDRIVE electric vehicle scheme enabled the deployment of over 1.13 million electric vehicles in its first year, despite reducing demand incentives to INR 5,000 per kilowatt-hour. This outcome represents more than three times the annual EV volumes achieved under the earlier FAME II program, highlighting improved market efficiency and buyer confidence.
Key outcomes observed under the scheme include:

• Lower subsidy dependence per vehicle

• Faster scale-up across multiple EV categories

• Improved alignment between policy support and market demand

India’s EV Market Expansion Accelerates Rapidly
India’s EV ecosystem has expanded at an unprecedented pace. Overall electric vehicle sales have grown nearly fifteen-fold since FY20, reaching close to 1.96 million units in FY25. This growth has lifted national EV penetration to 7.49 percent, indicating that electrification is moving beyond early adoption into mainstream mobility.
The transition reflects a shift from incentive-led adoption to demand-led growth, supported by improving product quality, wider model availability, and falling battery costs.
Electric Two-Wheelers Lead the EV Transition
Market composition has evolved significantly over the past five years. While electric three-wheelers initially drove early volumes, electric two-wheelers now dominate India’s EV landscape, accounting for more than 1.15 million units sold in FY25 alone. This shift reflects affordability, urban commuting needs, and faster charging compatibility.
Other notable trends include:

• Rising adoption of commercial electric four-wheelers

• Growing fleet electrification in urban logistics

• Increased use of EVs in shared mobility applications

Regional Disparities Shape Adoption Patterns
EV penetration across India remains uneven. Higher-income states and union territories such as Delhi, Goa, and Karnataka show diversified adoption across vehicle categories, with electric two-wheeler penetration nearly five times higher than in lower-income regions. In contrast, states like Bihar and Tripura remain heavily dependent on electric three-wheelers.
In these regions, electric three-wheelers account for over half of total EV penetration, underlining the need for region-specific policy calibration rather than uniform nationwide assumptions.
Segment-Wise Performance Against Targets
Performance against FY25 targets varies sharply by vehicle category. Commercial electric three-wheelers exceeded targets by a wide margin, while other segments lagged behind.
Segment performance highlights include:

• Commercial electric three-wheelers achieving 153 percent of targets

• Electric two-wheelers reaching 95 percent of planned deployment

• Electric rickshaws and e-carts meeting only a small fraction of targets

Policy Design Shifts Under PM EDRIVE
The PM EDRIVE electric vehicle scheme introduces several structural changes aimed at long-term sustainability. Charging infrastructure funding has doubled to INR 20 billion, coverage has expanded to include electric trucks and ambulances, and localization has been strengthened through Aadhaar-enabled e-vouchers.
Additional measures include scrappage-linked incentives for electric buses and trucks, reinforcing the link between fleet renewal and electrification.
Strategic Priorities for Sustained EV Growth
To maintain momentum, experts recommend embedding India’s 30 percent EV adoption target for 2030 into a formal national policy framework. Clearer state-level goals are needed to reduce regional imbalances and align investments with actual demand.
Further priorities include:

• Dynamic reallocation of PM EDRIVE budgets toward high-demand segments

• Improved transparency through a unified national EV dataset

• Targeted support for MSMEs, public fleets, rural markets, and informal transport operators

India’s automotive sector, contributing over 7 percent to GDP and supporting more than 30 million jobs, is entering a phase where electric mobility is becoming economically integrated rather than policy-dependent. The performance of the PM EDRIVE electric vehicle scheme reflects a maturing market that is increasingly capable of sustaining growth with smarter, more focused policy support.