TL;DR
India is shifting its PM E-Drive scheme to prioritize electric buses and trucks and their charging infrastructure, phasing out incentives for two and three-wheelers by March 2026 to combat air pollution.
India is strategically reorienting its electric vehicle (EV) incentive programs for 2026, prioritizing electric buses and trucks along with associated charging infrastructure under the ₹10,900 crore PM E-Drive scheme. This marks a significant shift away from providing incentives for electric two- and three-wheelers, which are scheduled to expire in March 2026. The government's decision is driven by a focus on mass transport, aiming to combat rising air pollution more effectively, despite the ongoing challenges of high costs and supply chain dependencies in the commercial EV segment.
This policy change emphasizes the greater contribution of larger vehicles to greenhouse gas emissions and urban air pollution compared to smaller vehicles. While the adoption of e-buses and e-trucks is increasing, they still constitute a small fraction of the overall market. Experts believe that achieving India's 30% EV adoption target by 2030 largely depends on the rapid scaling of the commercial vehicle segment. The total cost of ownership for electric buses is becoming competitive with internal combustion engine buses in urban settings, further supporting this strategic pivot.
