India’s PM E-DRIVE scheme has delivered significantly higher electric vehicle (EV) sales despite offering lower per-vehicle subsidies compared to the earlier FAME II programme, according to a new study by the Council on Energy, Environment and Water (CEEW).
The study found that PM E-DRIVE achieved an annualised sales volume of 11.3 lakh electric vehicles, more than three times the 3.3 lakh vehicles recorded under FAME II. This was accomplished even as the per-unit incentive under PM E-DRIVE was reduced to ₹5,000 per kilowatt-hour, half of the ₹10,000 per kWh subsidy offered under FAME II.
CEEW noted that the findings suggest growing market maturity in parts of India’s EV ecosystem, with demand continuing to rise even as government support per vehicle has declined.
The total financial outlay for PM E-DRIVE stands at ₹10,900 crore, slightly lower than the ₹11,500 crore allocated under FAME II. However, the newer scheme covers a wider range of vehicle segments, including electric ambulances and electric trucks, indicating a broader policy focus.
Commenting on the findings, Karthik Ganesan, Fellow and Director – Strategic Partnerships at CEEW, said the transition from FAME II to PM E-DRIVE represents an important inflection point in India’s EV policy. He added that delivering higher volumes with lower incentives shows that some market segments are beginning to scale independently. At the same time, variations across vehicle categories and states highlight the need for better policy coordination and infrastructure readiness.
The study highlighted a change in the composition of EV sales over time. While electric three-wheelers, particularly e-rickshaws, dominated the market in the early years, electric two-wheelers have now emerged as the largest segment, with over 1.15 million units sold. Electric buses and commercial four-wheelers also recorded steady growth during the period.
Uneven adoption across states
CEEW pointed out significant differences in EV adoption across states. Higher-income states such as Delhi and Karnataka have shown more diversified adoption across electric cars, buses and two-wheelers. In contrast, lower-income states such as Bihar continue to see EV adoption concentrated mainly in the electric three-wheeler segment.
Apoorv Minocha, Research Analyst at CEEW, said that, with demand now established, the next phase of India’s EV transition will depend on clear, consistent policy signals. He recommended formalising a national 2030 EV target, aligning state-level goals, improving data transparency and recalibrating incentives based on actual uptake to ensure adoption expands beyond a few segments and states.
The study said such measures would be critical to extending electrification to MSMEs, public fleets, rural markets and informal transport operators, helping create a more balanced and inclusive EV transition.
