State Bureau, New Delhi. According to a new independent study by the Green Finance Center (GFC) of the Council on Energy, Environment and Water (CEEW), the PM e-Drive scheme supported the sale of 11.3 lakh electric vehicles in its first year with half the subsidy per vehicle compared to FAME-II.
This signals a decisive shift from market activation to systemic integration. Despite halving the demand incentive per unit, PM e-Drive has enabled 3.4 times higher EV sales annually compared to FAME II.
This rapid growth coupled with low subsidies shows that India's EV sector is maturing, and is flexible and ready to be integrated into the economy over the long term. India's automotive sector, which contributes 7.1 per cent to GDP and provides over 3 crore jobs, is changing rapidly. Sales of electric vehicles have increased fifteen times compared to financial year 2019-20. This increased from 2,000 units of EVs in FY 2014-15 to about 19.6 lakh units in FY 2024-25, taking the share of EVs in total vehicles to 7.49 per cent. The CEEW-GFC study 'Navigating India's Electric Mobility Transition: Market Dynamics to Policy Shifts' assessed the trends in electric vehicle adoption at the national level. and the performances of FAME II (FY 2019-20-FY 2023-24) have been compared with the results of PM e-Drive (FY 2024-25-FY 2027-28).
FAME II was instrumental in establishing the EV market in India, while PM e-Drive builds on the same foundation to drive the adoption of electric vehicles with efficiency and sustainability. CEEW-GFC's analysis shows that India's EV market is structurally developed. Initially, the number of e-rickshaws was higher among electric vehicles (FY 2019-20 - FY 2020-21), but the situation has changed. Electric two-wheelers have seen a significant surge after FY 2021-22 and have become the largest EV segment with sales of more than 11.5 lakh units by FY 2024-25.
This signals a shift away from informal and commercial use of EVs towards large-scale household and enterprise use. The EV mix is also growing, with commercial four-wheeler electric vehicles seeing a clear growth by FY 2024-25, indicating increasing adoption of electric vehicles in urban logistics and shared mobility.
Furthermore, electric buses, despite still being a small share, show a steady growth, indicating early stages of institutional adoption.
Karthik Ganesan, Fellow and Director – Strategic Partnerships, CEEW said, “Moving from FAME II to PM e-Drive is a significant change in India's EV policy. Sales of 11.3 lakh electric vehicles with low per-unit incentives shows that parts of the market are starting to stand on their own.
Together, the variation seen across vehicle categories and states explains why it is important to focus on policy coherence, infrastructure preparation and targeted interventions in the next phase rather than expecting uniform adoption of EVs across the country.' PM doubles the allocation for e-drive charging infrastructure to Rs 20 billion, and also includes e-trucks and e-ambulances, localization through Aadhaar-enabled e-vouchers Makes stronger. Besides, it also offers scrappage-linked incentives for electric buses and trucks.
Disparity in EV adoption across states and vehicle categories
Despite good performance at the national level, conditions for the adoption of electric vehicles vary. Adoption of electric two-wheelers, electric four-wheelers and e-buses is seen to vary across high-income states and union territories such as Delhi, Goa and Karnataka, where electric two-wheeler usage is nearly five times higher than low-income states.
Low-income states like Bihar and Tripura still rely heavily on electric three-wheelers, which account for more than 52 percent in these sectors. According to the CEEW-GFC study, PM e-Drive results also vary across EV vehicle categories. Commercial electric three-wheelers (L5 category – excluding e-rickshaws and e-karts) crossed the FY 2024-25 target with a jump of 153 per cent, electric two-wheelers achieved 95 per cent of the target, while electric rickshaws and e-karts achieved only 5 per cent of the target. Apoorva Minocha, Research Analyst, CEEW, said, “With strongly established demand, sustained and widespread India's EV transition now depends on clarity and consistency of policy signals for adoption.
For this electrification of vehicles to expand beyond a few regions and states to reach the MSME (micro, small and medium enterprises) sector, public transport, rural markets and informal transport operators, it will be important to formalize the 2030 EV target, align state-level ambitions, improve data transparency, and reframe incentives based on actual usage.
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