The government has extended the demand incentive for cargo electric three-wheelers under the PM E-Drive scheme at a reduced rate for the current financial year, a senior government official said.
The extension comes after the allocated subsidy for electric cargo three-wheelers under the scheme for the financial year 2025 exhausted earlier this month. The scheme’s target for 2024-25 was to incentivise 80,546 cargo electric three-wheelers and the target was achieved in the first week of November.
The incentives for cargo electric three-wheelers which were earlier applicable for 1.25 lakh units for 2025-26, starting from April next year will be applicable now, the official said. Cargo electric three-wheelers will be eligible for subsidies at a reduced rate of Rs 2,500 per kWh with a cap of Rs 25,000 per vehicle.
Under the PM E-Drive scheme this year, the government had set a target of incentivizing 80,546 electric cargo three-wheelers in the first year at a rate of Rs 5,000 per kWh with a cap of Rs 50,000 per vehicle. In the FY26, the target is to incentivise 1.25 lakh units at Rs 2,500 per kWh with a cap of Rs 25,000 per vehicle.
Autocar Professional had earlier reported that the government is unlikely to extend demand incentives on purchasing electric two-wheelers and three-wheelers beyond financial year 2026.
The three-wheeler space is witnessing significant progress in the electric vehicle adoption. Around 54% of the three-wheelers sold in the first half of the financial year were electric. M&M and Bajaj Auto are the major players in this market.
Earlier today, Anish Shah, the president of the Federation of Indian Chambers of Commerce and Industry, and group CEO and managing director of Mahindra Group, said the electric three-wheeler industry will not have to depend on government subsidies beyond the financial year 2026 as the industry will reach a level of scale of self-sufficiency.