20 Nov 2024
The central government has reinstated subsidies for electric cargo three-wheelers (e-3Ws) under the PM E-DRIVE scheme. This move comes after achieving the program's initial sales targets in record time. However, the subsidy has been reduced to ₹2,500 per kilowatt (kW), capped at ₹25,000 per vehicle. Moreover, this is half the original amount offered under the Ministry of Heavy Industries (MHI).
Key Highlights of the Revised Subsidy
1. Reduced Subsidy Rate: The current subsidy stands at ₹2,500 per kW, capped at ₹25,000 per e-3W unit.
2. Target Reset: Subsidies will now apply to 80,546 e-3Ws sold in FY 2024-25, with vehicles exceeding this target ineligible for fiscal benefits.
3. PM E-DRIVE Scheme: The initiative is aimed at boosting locally manufactured EV sales, with broader goals covering e-2Ws, e-ambulances, and other electric vehicle categories.
Impact of the Revised Subsidy on the EV Market
The government’s decision to reduce subsidies follows swift progress in achieving sales targets for electric two- and three-wheelers under the PM E-DRIVE scheme. The subsidy revision aligns with updated fiscal goals, ensuring continued support for EV adoption while balancing budgetary constraints.
Restoration Timeline and Sales Achievements
The subsidy, which was paused temporarily, has been reintroduced effective November 8, 2024. Official data shows:
- E-3W (L5) Sales: Over 79,974 units sold till November 7, with an adjusted target of 80,546 units for FY 2024-25.
- E-2W Sales: 690,000 units sold, nearing 65% of the 1 million-unit subsidy goal for this fiscal year.
Despite strong sales of e-2Ws and e-3Ws, smaller variants like e-rickshaws and e-carts have struggled to meet expectations. Specifically, they have achieved only 1,214 units against a target of 43,371 for FY 2024-25.
Broader Goals of PM E-DRIVE
The PM E-DRIVE scheme, a successor to the FAME initiative, promotes the adoption of locally manufactured EVs. The program also funds infrastructure projects, including EV charging stations and advanced vehicle testing facilities. For FY 2025-26, the center aims to support the sale of:
- 1.42 million e-2Ws
- 125,000 e-3Ws (L5)
- 67,000 e-rickshaws and e-carts
Official Statement
A senior government official stated, “The incentive, initially meant for FY 2025-26 sales, has been advanced to November 8, 2024. This ensures continued momentum in the adoption of cargo electric three-wheelers.”
Challenges Ahead
While the reinstatement of subsidies boosts confidence in the EV sector, experts highlight challenges in achieving targets for smaller electric three-wheelers like e-rickshaws. Industry stakeholders are urged to innovate and promote these variants to meet the government’s ambitious EV adoption goals.
The government’s recalibrated approach balances fiscal responsibility with continued EV market growth. As EV adoption surges, this move signals sustained support for a cleaner, greener transportation future.
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