Policy reset: Clear split between segments
In a notification issued on March 27, 2026, the Ministry of Heavy Industries said the scheme, capped at ₹10,900 crore, will remain in force till March 31, 2028, or until funds are exhausted, after which “no further claims will be entertained”.
It added that incentives for registered electric two-wheelers will apply only to vehicles registered on the portal till July 31, 2026, with support continuing at ₹2,500 per kWh, capped at ₹5,000 per vehicle.
For electric three-wheelers, incentives for e-rickshaws and e-carts will continue for the full duration of the scheme, i.e., till March 31, 2028, unless funds are exhausted earlier.
‘Registration cliff’ for two-wheelers
Industry executives said the change creates a compressed window for electric two-wheelers, setting up what many describe as a “registration cliff” ahead of the July deadline.
Hemant Kabra, Founder and Managing Director of BGauss, said the move brings clarity as the market transitions away from subsidy-led demand.
“The extension ensures continuity in policy support while allowing the industry to move towards a more self-sustaining model. For electric two-wheelers, this transition phase is critical as manufacturers recalibrate pricing, localisation and scale,” he said.
The 3W segment gets a longer runway
For the three-wheeler segment, which continues to receive longer policy support, sentiment is more positive.
Uday Narang, Founder and Chairman of Omega Seiki Mobility (OSM), said the decision reinforces the government’s focus on last-mile electrification. “
Extending incentives for electric three-wheelers, particularly e-rickshaws and e-carts, till 2028 is a strong positive for last-mile logistics. It will support deliveries and e-commerce use cases, where low-speed electric three-wheelers are seeing increased adoption, while providing long-term visibility for fleet operators where total cost of ownership is already the primary driver,” he said.
March rush: Discounts peak before the deadline
The policy reset follows a sharp spike in demand in March, driven by expectations around subsidy timelines.
As the March 31, 2026, deadline approached, electric two-wheeler makers rolled out aggressive “pre-buying” campaigns, offering ₹20,000–₹30,000 in total benefits per vehicle by stacking manufacturer discounts on top of the government subsidy.
Companies such as Ola Electric, Ather Energy, TVS Motor, and Bajaj Auto offered a mix of direct price cuts, cashback, financing schemes and bundled benefits to accelerate purchases.
Ola Electric led the push with ₹35,000–₹50,000 in combined benefits, pricing entry models such as the S1 X as low as ₹49,999, while the S1 Air and S1 Pro were offered at around ₹90,000 and ₹1.15 lakh, respectively.
Ather delivered ₹20,000–₹25,000 in savings, while TVS Motor offered a ₹5,500 nationwide cashback on the iQube S to counter competitive pricing. Bajaj Auto, meanwhile, sharpened its entry play with the sub-₹1 lakh Chetak C2501. as a leg up to the discounts coming to a close
Pre-buying cycle may to continue till July
Industry executives said such pricing strategies were aimed at clearing inventory ahead of subsidy timelines, with many expecting a calibrated extension rather than a full withdrawal.
With incentives for electric two-wheelers now applicable only till the end of July, OEMs spoken to by Businessline are in the process of evaluating whether to sustain or recalibrate these offers, extending the pre-buying cycle as buyers rush to lock in benefits before the final cut-off.
Shift towards fleet-led electrification
Experts said the move signals a broader transition in India’s EV strategy, from retail subsidy-led adoption towards commercial and fleet-driven electrification.
“The direction is clear, support is being prioritised for segments where utilisation is high, and economics are already compelling,” said an industry analyst. “For two-wheelers, the expectation now is that scale and cost reductions will drive the next phase of growth.”
Published on March 28, 2026