TL;DR
India has updated its EV policy to prioritize performance and efficiency over volume, linking incentives to specific technical requirements and allocating funds for charging infrastructure.
India has revised its electric vehicle (EV) policy, moving from volume-driven subsidies to performance-based incentives. This change, effective from January 13, 2026, mandates that only EVs meeting specific performance and efficiency criteria will qualify for government incentives. The new requirements include an 80km minimum driving range, a top speed of 40 km/h, regenerative braking systems, and standardized energy-consumption testing.
This policy adjustment aligns the production-linked incentive (PLI) auto scheme with the Prime Minister Electric Drive Revolution in Innovative Vehicle Enhancement (PM e-drive) scheme. The PM e-drive initiative offers immediate discounts on two and three-wheel vehicles and provides financial incentives for establishing EV charging stations. The government has allocated ₹20 billion ($237.7 million) to support companies installing fast charging stations for two and three-wheelers.
While subsidies for electric two and three-wheelers will conclude in March 2026, support for electric buses, trucks, ambulances, charging stations, and testing centers will continue until March 2028, acknowledging the significant investment still required for widespread adoption in these segments. The policy shift reflects growing confidence in India’s electric mobility ecosystem, supported by strong EV sales in 2025, which saw over 2.3 million units sold.
