Our Terms & Conditions | Our Privacy Policy
The PM-E Drive Scheme further excludes subsidies for electric four-wheelers and hybrid vehicles, shifting focus away from these segments.Investors have applied a break on pumping cash into India’s Electronic Vehicle (EV) sector. Between 2022-24, the EV sector lost half of its funding, a report revealed. Data from Venture Intelligence shows that funding in India’s EV industry declined to USD 586 million in 2024, down from USD 808 million in 2023, while the number of deals remained consistent at 44 compared to the previous year.
Investors are now asking for a more profitable environment to go big with their funding. The subsidy reduction under the PM-E Drive scheme has impacted the funding as investors are now concerned about the government’s lack of incentives. The government on the other hand is looking to reduce the reliance on subsidies which is based on battery power with a fixed rate of INR 5,000 per kilowatt hour (kWh) in the first year, capped at INR 10,000.
What has changed for EV sector?
Earlier, the FAME-II scheme, aimed at promoting electric vehicles (Faster Adoption & Manufacturing of Electric Vehicles), offered peak incentives of INR 15,000 per kWh, covering up to 40% of a vehicle’s cost. However, in 2023, these incentives were revised to INR 10,000 per kWh, with the cap reduced to 15% of the vehicle’s ex-factory price.
The PM-E Drive Scheme further excludes subsidies for electric four-wheelers and hybrid vehicles, shifting focus away from these segments. Despite these challenges, the industry saw notable investments. Ather Energy raised USD 71 million from the National Investment and Infrastructure Fund (NIIF), propelling the electric scooter maker into the unicorn club as it prepares for an IPO.
Slower growth trajectory
Over 1.9 million EVs were sold in 2024, marking a 24.5% increase from the 1.5 million units sold in 2023. This growth, however, reflects a slowdown compared to the 50% surge observed between 2022 and 2023, according to government data from the Vahan website.
The electric two-wheeler segment, which celebrated the first public listing of an Indian manufacturer with Ola Electric this year, recorded total sales of 1.13 million vehicles in 2024, up from 860,000 units in 2023.
Despite challenges, optimism in India’s EV sector remains strong, driven by the government’s target of 30% EV penetration in new registrations by 2030. Stakeholders foresee increased capital inflows, fuelled by growth in areas like component manufacturing, charging infrastructure, and battery swapping. Battery swapping, especially for gig economy two-wheelers, is booming.
Battery swapping is a technology that enables electric vehicles (EVs) to replace a depleted battery with a fully charged one in a matter of minutes, offering a faster alternative to traditional charging stations.
- Published On Dec 26, 2024 at 01:08 PM IST
Join the community of 2M+ industry professionals
Subscribe to our newsletter to get latest insights & analysis.
Download ETAuto App
- Get Realtime updates
- Save your favourite articles
Scan to download App
Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.
Aggregated From –
Comments are closed.