Government Seeks Approval to Extend EV Subsidies for Two and Three Wheelers Beyond March 31

The government is considering extending financial support for electric two- and three-wheelers as the current subsidy timeline approaches its end. The proposal has been sent for approval, with authorities reviewing utilisation levels and adoption trends under the existing scheme. The move reflects ongoing efforts to support electric mobility while addressing sector-specific challenges.

Proposal to Extend EV Subsidies

Ministry of Heavy Industries has approached the Ministry of Finance to seek approval for continuing subsidies on electric two-wheelers (e2w) and electric three-wheelers (e3w) beyond 31 March 2026, as per The Economic Times report.

The extension is subject to clearance from the finance ministry, as the current subsidy window is set to expire unless further approval is granted.

Subsidy Utilisation Under the Scheme

The subsidies are being provided under the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme.

Out of an allocation of ₹1,772 crore for electric two-wheelers, approximately ₹1,259.91 crore has already been utilised. For electric three-wheelers, around ₹737.35 crore has been spent from a total allocation of ₹907 crore.

These figures indicate steady uptake of incentives across both segments.

Scheme Timeline and Scope

The PM E-DRIVE scheme was introduced in September 2024 with a total outlay of ₹10,900 crore over two years. While the broader scheme has been extended until March 2028, this extension mainly supports categories such as electric trucks, buses and testing infrastructure.

However, subsidies for electric two- and three-wheelers are currently scheduled to end on 31 March 2026, pending further approval.

Adoption Trends in Electric Mobility

Government estimates suggest that around 1 million electric two-wheelers have been sold under the scheme so far, against a target of 1.4 million units.

The continued demand for electric vehicles, particularly in the two- and three-wheeler segments, has contributed to the push for extending subsidy support.

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Conclusion

The proposal to extend subsidies for electric two- and three-wheelers highlights ongoing policy consideration for supporting EV adoption. The final decision will depend on approval from the finance ministry, with implications for both manufacturers and consumers in the electric mobility space.

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