PM E-DRIVE scheme has been notified. Maximum allocation is towards electric two wheeler and electric buses. However, maximum subsidy on electric two wheelers has been reduced to just Rs.5,000 (from 2025-26). From around Rs.45,000 subsidy in FAME-I, the subsidy has been slashed by a whopping 90 per cent. Government feels electric two wheelers no longer require subsidy. This is the reason why subsidy has been slashed steeply. I feel till the charging infrastructure is not in place, EV adoption will continue to be slower.
Second point is that with reduced subsidy, the time to breakeven for an EV buyer will be longer. At present, it takes around 2 years to breakeven for an electric two wheeler buyer considering the higher cost he has paid for the vehicle. This will increase to 2.5 years. And with per unit electricity cost rising, this may even take longer time.
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