India Ends Subsidy for Electric Three-Wheelers After Hitting Adoption Targets
Government Withdraws PM e-Drive Subsidies
India's central government has pulled subsidies for electric three-wheelers after achieving its adoption target under the PM e-Drive scheme, marking a milestone as the segment reached 32% EV penetration—well within the government's 20-30% goal. The decision, effective after December 26, 2025, comes as the ₹857 crore fund allocated for the category was exhausted three months ahead of schedule.
The move reflects the segment's maturity, with over 750,000 electric three-wheelers sold in 2025 alone, representing more than 60% of all three-wheelers purchased in India. Officials confirmed that the scheme's target of approximately 290,000 units under the L5 category was met on Friday, prompting the immediate withdrawal of incentives.
📌 Key Points for Aspirants
- PM e-Drive scheme successfully achieved 32% EV penetration in three-wheeler segment
- ₹857 crore fund was exhausted 3 months ahead of schedule
- Over 750,000 electric three-wheelers sold in 2025
- Government shifted focus to electric two-wheelers with only 7.5% penetration
- States like Delhi to take lead with own EV incentive schemes
- Subsidy reduction for two-wheelers: ₹5,000 to ₹2,500 per kWh
- Infrastructure expansion requires private charging service providers
Two-Wheelers to Continue Receiving Support
While three-wheeler subsidies have ended, electric two-wheelers will continue receiving government support into the next financial year due to slower adoption rates. EV penetration in the two-wheeler segment stands at just 7.5%, with approximately 18.3 lakh units sold against a target of 25 lakh. The government expects this number to reach 23 lakh by the end of the current fiscal year, necessitating a spillover into FY 2025-26.
Under the PM e-Drive scheme, launched in October 2024 with a ₹10,900 crore outlay, subsidies for two-wheelers were halved from ₹5,000 per kWh to ₹2,500 per kWh in the current fiscal year. A final decision on extending or modifying these incentives is expected early in the new year.
💡 Important for Government Job Aspirants
Current Affairs Topic: This news is highly relevant for UPSC, SSC, Banking, and Railway exams as it covers government policy on green energy and sustainable transport.
Key Takeaway: The PM e-Drive scheme demonstrates government's focus on environmental sustainability and achieving EV targets through policy-driven incentives.
States to Take Lead on EV Incentives
The central government is now passing responsibility for EV promotion to state governments, several of which are preparing their own incentive schemes. Delhi, grappling with severe air quality issues, is expected to announce a new EV policy package in January 2026. The draft proposal reportedly includes subsidies of up to ₹40,000 for electric two-wheelers, double the current cap.
The PM e-Drive scheme's targets for electric buses and trucks—14,000 and 5,643 units respectively—have seen minimal uptake as vehicles remain in testing phases. Industry executives have emphasized the need for expanded charging infrastructure, requiring greater participation from private service providers.
🎯 Practice Questions (Based on This News)
The three-wheeler segment achieved 32% EV penetration, exceeding the government's target of 20-30%.
₹857 crore was allocated for the three-wheeler category, which was exhausted three months ahead of schedule.
The two-wheeler segment has only 7.5% EV penetration, with 18.3 lakh units sold against a target of 25 lakh units.
Subsidies for two-wheelers were halved from ₹5,000 per kWh to ₹2,500 per kWh in the current fiscal year.
Delhi is expected to announce a new EV policy package in January 2026 with subsidies up to ₹40,000 for electric two-wheelers.
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