The Ministry of Heavy Industries (MHI) reported that the central government has approved additional funding of 1000 crore rupees for the electric two-wheeler (e2W) segment under the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) program. These incentives will be valid until March 2028.
This additional funding was requested by the ministry after the initial validity period for e2W benefits was set to expire in July 2026. An official representative of MHI stated that following an appeal to the Ministry of Finance, which agreed to the request, an additional 1000 crore rupees was sanctioned specifically for e2Ws.
Currently, the penetration of e2Ws in India stands at about 7.6 percent. The government's goal is to increase this figure to 9–10 percent, as two-wheelers are widely used by the public and help solve last-mile mobility issues.
Initially, the PM E-DRIVE program was launched in September 2024 with a total allocation of 10,900 crore rupees and was originally planned to run from October 1, 2024, to March 31, 2026. The government subsequently extended the overall program by two years to March 31, 2028, and then again until July 31, 2028. Under this scheme, each approved e2W receives an incentive of up to 5000 rupees.
The ministry's decision to seek additional support for e2Ws comes against the backdrop of gradually reducing incentives in segments where electric vehicle adoption has sharply increased. As an example, the official mentioned electric three-wheelers of category L5, or heavier three-wheeled models. Since penetration in this segment reached a very high level of 41 percent, exceeding expectations, subsidies for this component were discontinued in December 2025.
The official noted that when developing the scheme, it was assumed that as the penetration of electric vehicles grows globally, government subsidies would gradually decrease and eventually cease. However, in his opinion, e2Ws have not yet reached the adoption level at which the ministry deems it possible to withdraw subsidies.
He also emphasized that India is already the second-largest e2W market globally, trailing China. Furthermore, it was noted that domestic industry has accumulated significant research and development (R&D) capabilities over the last five to six years. The official stated that R&D teams in the sector are very large, and e2W capabilities rank among the best in the world.
The government expects further industry progress over the next two years, believing that the required milestones will be achieved within the next two years. To date, the PM E-DRIVE program has provided incentives to approximately 2.5 million electric two-wheelers.
