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PM EDRIVE Outperforms FAME II: How Lower Subsidies Drove 3.4x EV Growth

A new study shows the PM EDRIVE scheme has dramatically outperformed its predecessor. It achieved over three times the annual electric vehicle sales despite offering buyers half the subsidy. The policy's success suggests parts of India's EV market are becoming self-sustaining. However, experts warn that consistent policy signals and targeted support are needed to ensure growth reaches all regions and vehicle segments.

Key Points: PM EDRIVE Achieves 3.4x Higher EV Growth Than FAME II Scheme

  • PM EDRIVE achieved 1.13 million annual EV sales with half the per-vehicle subsidy of FAME II
  • The scheme's broader focus now includes electric ambulances and commercial trucks
  • Electric two-wheelers now lead sales, surpassing early e-rickshaw dominance
  • Growth remains uneven, with wealthier states showing more diverse EV adoption than poorer ones
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PM EDRIVE achieves 3.4x higher annual EV growth than FAME II: Report

A CEEW report reveals PM EDRIVE delivered 1.13M EVs with half the subsidy per vehicle, marking a major shift in India's electric vehicle policy success.

"The shift from FAME II to PM EDRIVE marks an important inflexion in India's EV policy. - Karthik Ganesan, CEEW"

New Delhi, December 17

PM EDRIVE delivered 1.13 million EVs with half the subsidy per vehicle compared to FAME II, according to a new study by the Council on Energy, Environment and Water (CEEW). The report highlighted that the government now gives less subsidy to buyers, but the sales numbers went up significantly. The PM EDRIVE scheme offers an incentive of INR 5, 000 per kilowatt-hour, which is exactly half of the INR 10, 000 offered under the previous FAME II scheme. Despite this reduction, the annual vehicle sales volume is much higher now.

The data shows that PM EDRIVE achieved an annualised volume of 1.13 million vehicles, while FAME II managed 0.33 million. This represents a huge jump in how many people buy electric vehicles. The total money set aside for the new scheme is Rs 109 billion, slightly less than the Rs 115 billion for the old one. However, the new policy covers more types of vehicles, including electric ambulances and trucks, which shows a broader focus.

Karthik Ganesan, Fellow and Director - Strategic Partnerships, CEEW, said, "The shift from FAME II to PM EDRIVE marks an important inflexion in India's EV policy. Delivering 1.13 million electric vehicles with lower per-unit incentives suggests that parts of the market are beginning to stand on their own. At the same time, the variation in outcomes across vehicle categories and states underscores why the next phase must focus on policy coherence, infrastructure readiness, and targeted interventions--rather than assuming uniform EV adoption across the country."

The study indicated that the type of vehicles people bought also changed. In the early years, e-rickshaws dominated the market. Now, electric two-wheelers take the lead with over 1.15 million units sold. The report also mentioned that electric buses and commercial four-wheelers saw steady growth.

However, the growth is not the same in every part of the country. The study noted that richer states like Delhi and Karnataka showed diverse adoption across cars, buses, and bikes. In contrast, states with lower incomes like Bihar still rely heavily on electric three-wheelers.

Apoorv Minocha, Research Analyst, CEEW, recommends that the government sets clear targets for 2030. "With demand firmly established, India's EV transition now depends on the clarity and consistency of policy signals to sustain and broaden adoption. Formalising the 2030 EV target, aligning state-level ambitions, improving data transparency, and recalibrating incentives based on real-world uptake will be critical to ensure that electrification spreads beyond a few segments and states to reach MSMEs, public fleets, rural markets, and informal transport operators," he said.

- ANI

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Reader Comments

R
Rohit P
Good to see the focus on commercial vehicles like ambulances and trucks. That's where the real impact on fuel imports and emissions will be. But the gap between states like Delhi and Bihar is worrying. The policy needs to ensure equitable growth, not just in metros.
K
Karthik V
As someone who bought an electric scooter last year, the lower subsidy wasn't a big deal. The running cost is so low compared to petrol! The real issue is charging infrastructure in my colony. Government needs to push for more public charging points now.
A
Anjali F
The numbers are impressive, but let's be honest. The growth is still concentrated. We need to make EVs affordable for the common person in smaller towns, not just high-income groups. Also, what about the battery disposal plan? That's a ticking time bomb.
D
David E
Interesting data. Achieving higher sales with half the subsidy per vehicle is a strong indicator of market acceptance. The analyst's point about policy coherence is crucial. A clear 2030 target will give manufacturers the confidence to invest more in local production.
S
Suresh O
Bas, this is the way forward! Less burden on the taxpayer, more vehicles sold. Jai Hind! 🚀 The inclusion of electric trucks is a game-changer for our logistics sector. Hope they work on the highway charging network next.

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