The PM E-DRIVE scheme has achieved annualised electric vehicle (EV) sales of 1.13 million units in its inaugural year, according to a study released by the Council on Energy, Environment and Water (CEEW). The findings highlight a sharp acceleration in EV adoption under the scheme, despite lower per-unit incentives compared with earlier programmes.
Under PM E-DRIVE, buyers receive a demand incentive of ₹5,000 per kWh, which is about half of the subsidy offered under the Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme. Even with the reduced incentive, the volume of EVs supported under PM E-DRIVE has been significantly higher.
Comparison with FAME II
FAME II was implemented over a five-year period from FY19 to FY24 with a total allocation of ₹11,500 crore. During this time, the scheme supported approximately 1.56 million electric vehicles, translating into an annualised volume of around 0.33 million units.
In contrast, PM E-DRIVE, which has a tenure of 3.5 years and an outlay of ₹10,900 crore, has already facilitated the adoption of about 2.85 million electric vehicles. The data indicates faster deployment and higher uptake within a shorter time frame.
Broader Vehicle Coverage
While FAME II supported electric two-wheelers, three-wheelers, four-wheelers and buses, PM E-DRIVE has expanded the scope to include additional categories such as electric trucks and electric ambulances. The scheme continues to cover E2W, E3W and E4W segments, reflecting the growing adoption of electric mobility across personal, commercial and public transport use cases.
Changes in EV Market Composition
The CEEW study points to a shift in the composition of India’s EV market over time. Initial growth was led by electric three-wheelers. From FY22 onwards, electric two-wheelers experienced faster adoption and emerged as the largest segment, crossing 1.15 million units by FY25.
Adoption of commercial electric four-wheelers has also increased, while electric buses have continued to see steady growth, albeit from a smaller base compared to other segments.
Charging Infrastructure and Policy Measures
PM E-DRIVE has allocated ₹2,000 crore for the expansion of charging infrastructure. In addition, the scheme incorporates Aadhaar-enabled e-vouchers and scrappage-linked incentives for electric buses and trucks. These policy measures complement the lower per-unit incentives and are aimed at supporting broader ecosystem development.
Regional Variations in Adoption
The study notes that EV adoption varies significantly across states and Union Territories. Higher-income regions such as Delhi, Goa and Karnataka have recorded uptake across multiple vehicle categories. In contrast, in lower-income states, electric three-wheelers remain the dominant segment, accounting for more than half of total EV adoption.
Summary
According to a CEEW study, the PM E-DRIVE scheme achieved annualised EV sales of 1.13 million units in its first year, surpassing adoption rates seen under FAME II. With expanded vehicle coverage, increased charging infrastructure funding and supporting policy measures, the scheme has accelerated EV deployment across segments, though adoption levels continue to differ across regions.
Disclaimer:
This article is intended solely for educational and informational purposes. The securities or companies mentioned are provided as examples and should not be considered as recommendations. Nothing contained herein constitutes personal financial advice or investment recommendations. Readers are advised to conduct their own research and consult a qualified financial advisor before making any investment decisions.
Investments in securities markets are subject to market risks. Please read all related documents carefully before investing.