EV Sector Surges: Ather Energy, Ola Electric Jump on Govt Extension of E-2W Subsidy
Shares of leading electric two-wheeler (e-2w) makers surged on Tuesday following a critical extension of benefits under the PM E-DRIVE scheme. The positive market reaction was fueled by the Ministry of Heavy Industries amending the subsidy structure for registered electric two-wheelers, signaling sustained government support for the rapidly growing EV segment.Government Amends PM E-DRIVE Scheme Subsidy Structure
The Ministry of Heavy Industries has formally amended the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme. This move directly impacts the incentive available to registered electric two-wheelers across different time horizons.A notification issued on August 10 outlines the subsidy adjustments. For the period spanning from April 1, 2025, to March 31, 2028, the incentive for these vehicles has been set at Rs 2,500 per kWh, capped at a maximum of Rs 5,000 per vehicle.
Subsidy Changes Details and Eligibility Criteria
The previous subsidy structure is also detailed in the notification. During the 2024-25 period, the incentive for registered electric two-wheelers stood at Rs 5,000 per kWh, capped at Rs 10,000 per vehicle. This variation underscores the evolving support mechanisms being introduced by the government.Crucially, eligibility under the revised scheme is tied to pricing constraints. The subsidy will be available only for electric two-wheelers that have a maximum ex-factory price of Rs 1.5 lakh.
Financial Scope and Market Reaction
The PM E-DRIVE Scheme carries an overall outlay of Rs 11,900 crore. Of this total, the notification provides dedicated fund support of Rs 2,767 crore for registered electric two-wheelers. This allocation is intended to cover a maximum of 45,79,120 vehicles. An additional Rs 55 crore has been allocated towards administrative expenses related to the scheme.The announcement triggered an immediate positive reaction from the market. Ather Energy shares jumped 4.5 percent, reaching Rs 1,532 per share on the NSE. Ola Electric Mobility also gained 1 percent in response to the updated government policy.
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