India’s PM EDRIVE scheme delivered 1.13 million electric vehicles in its first year while offering half the per-vehicle subsidy compared to the previous FAME II program, according to a new study by the Council on Energy, Environment and Water.
The scheme reduced per-unit demand incentives to INR 5,000 per kilowatt-hour, yet enabled 3.4 times higher annual EV volumes than FAME II. This performance suggests India’s EV sector is gaining resilience and moving toward long-term economic integration.
The research, titled “Navigating India’s Electric Mobility Transition: Market Dynamics to Policy Shifts,” compared FAME II’s performance from FY20 to FY24 with PM EDRIVE’s trajectory from FY25 to FY28. India’s overall EV sales have grown fifteen-fold since FY20, reaching approximately 1.96 million units in FY25 and pushing total EV penetration to 7.49 percent.
The study found that India’s EV market composition has shifted significantly. While e-rickshaws dominated early adoption in FY20-FY21, electric two-wheelers have since become the largest segment, with over 1.15 million units sold in FY25. Commercial electric four-wheelers also showed notable growth, indicating fleet electrification in urban logistics and shared mobility sectors.
However, adoption patterns vary considerably across regions and vehicle categories. Higher-income states and union territories such as Delhi, Goa, and Karnataka demonstrate diversified EV adoption, with electric two-wheeler penetration nearly five times higher than in lower-income states. Bihar and Tripura remain heavily dependent on electric three-wheelers, which account for over 52 percent of EV penetration in these regions.
Performance against targets also varied by segment. Commercial electric three-wheelers exceeded FY25 targets at 153 percent, electric two-wheelers reached 95 percent, while electric rickshaws and e-carts achieved only 5 percent of their targets.
Karthik Ganesan, Fellow and Director of Strategic Partnerships at CEEW, noted that delivering over a million electric vehicles with lower per-unit incentives indicates parts of the market are becoming self-sufficient. He emphasized that future policy must focus on coherence, infrastructure readiness, and targeted interventions rather than assuming uniform adoption nationwide.
PM EDRIVE doubles the allocation for charging infrastructure to INR 20 billion, expands coverage to e-trucks and e-ambulances, strengthens localization through Aadhaar-enabled e-vouchers, and introduces scrappage-linked incentives for electric buses and trucks.
The study recommends several measures to sustain momentum. These include formally embedding India’s 30 percent EV adoption target for 2030 in a national policy framework with category-wise sub-targets, establishing clearer state-level EV targets to reduce regional disparities, and improving transparency through an expanded PM EDRIVE dashboard and unified national dataset.
Researchers also called for dynamic recalibration of PM EDRIVE budgets, redirecting resources toward high-demand segments while revisiting incentive structures where adoption lags, particularly for MSMEs, public fleets, rural markets, and informal transport operators.
India’s automotive sector contributes 7.1 percent to GDP and supports over 30 million jobs. The sector is undergoing rapid transformation as the country pursues its electric mobility transition.