Electric Vehicles in India: FAME-II, PM E-Drive, PLI for Batteries and the EV30@30 Vision

Electric vehicles in India have moved from a policy curiosity to a mainstream segment in less than a decade. From under 2,000 annual sales in 2014-15, electric vehicles in India crossed 19 lakh registrations in 2024-25, taking the cumulative on-road EV fleet past 50 lakh units and pushing the all-segment penetration past 7.5%, with two-wheelers and three-wheelers leading. The momentum has been driven by Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME-II) between 2019 and 2024, the successor PM E-Drive scheme launched in March 2024, the ₹18,100 crore PLI for Advanced Chemistry Cell (ACC) battery storage, the PM E-Bus Sewa for city buses and aggressive plays by Tata Motors, Mahindra, Ola Electric, Ather Energy, TVS, Bajaj and the upcoming Reliance-BlackRock joint venture. Electric vehicles in India are also central to the country’s Paris Agreement commitments, the green hydrogen economy, the solar energy push, the India Semiconductor Mission and the next-generation battery technologies supply chain.

Why Electric Vehicles Matter for India

Transport is responsible for about 14% of India’s CO₂ emissions and a much larger share of urban air pollution. India also imports over 85% of its crude oil — roughly $130 billion in 2024-25. Electrifying road transport addresses both problems simultaneously: it slashes tailpipe emissions, cuts oil import dependence and creates a large domestic market for batteries, motors, power electronics and software.

The Government of India’s NITI Aayog has set an aspirational EV30@30 target — 30% EV penetration of all new vehicle sales by 2030, broken down further into 70% for commercial vehicles, 40% for buses, 30% for private cars and 80% for two-wheelers and three-wheelers.

Policy Evolution — From NEMMP 2020 to PM E-Drive

India’s EV policy did not appear overnight. It has evolved through four phases.

NEMMP 2020 (2013)

The National Electric Mobility Mission Plan 2020 was the first comprehensive framework — it set a target of 6-7 million EVs by 2020. The target was missed, but it created the institutional momentum.

FAME-I (2015-19)

The first phase of Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-I) had a budget of ₹895 crore and supported 2.78 lakh hybrid and electric vehicles plus 520 charging stations. It was a learning phase that exposed the need for stronger localisation rules.

FAME-II (2019-24)

FAME-II was the breakthrough scheme. Launched on 1 April 2019 with an outlay of ₹11,500 crore (later enhanced), FAME-II provided demand-side subsidies for electric two-wheelers, three-wheelers, four-wheelers and buses, with strict Phased Manufacturing Programme (PMP) localisation requirements. By its scheduled close on 31 March 2024 the scheme had supported about 16 lakh EVs and seeded over 7,000 public charging stations. It also forced battery and component localisation that became the foundation of today’s EV ecosystem.

Electric Mobility Promotion Scheme (April-September 2024)

A short bridge scheme between FAME-II and PM E-Drive that supported electric two-wheelers and three-wheelers at reduced subsidy rates.

PM E-Drive (September 2024 – March 2026)

The PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-Drive) scheme replaced FAME-II with a ₹10,900 crore outlay over two years from October 2024. PM E-Drive covers electric two-wheelers (24.79 lakh units), three-wheelers (3.16 lakh units), trucks (3.4 lakh), buses (14,028) and the e-ambulance segment. The scheme increases the focus on commercial vehicles and on public and shared mobility.

The PLI-ACC Scheme for Batteries

The ₹18,100 crore Production Linked Incentive scheme for Advanced Chemistry Cell battery storage was approved by the Union Cabinet in May 2021. Two rounds of bidding have awarded 50 GWh of ACC manufacturing capacity to Ola Cell Technologies, Reliance New Energy, Rajesh Exports, Hyundai-Exide, Anvil Cables and ACC Energy Storage. A third round for the residual 20 GWh closed in 2024.

The PLI is the supply-side counterpart of PM E-Drive. By 2030 India aims to have 100-120 GWh of domestic ACC capacity — sufficient to anchor a fully indigenous EV supply chain and emerging energy-storage applications.

PM E-Bus Sewa — Electric Buses for Cities

The PM E-Bus Sewa scheme, approved in August 2023 with a ₹57,613 crore outlay over 10 years, will deploy 10,000 electric buses in 169 cities under a Gross Cost Contract (GCC) model where private operators run the buses and cities pay per-kilometre rates. Phase II expanded this to 38,000 e-buses. The scheme is implemented by Convergence Energy Services Limited (CESL).

PM E-Bus Sewa is the largest single electric-bus deployment programme in the world and is decisive for decarbonising urban mass transit, which contributes disproportionately to local air pollution.

Charging Infrastructure and Battery Swapping

India had over 25,000 public charging stations by early 2026, with installations accelerating thanks to the PM E-Drive’s ₹2,000 crore allocation for fast chargers along highways and in city clusters. Bharat Heavy Electricals (BHEL), Tata Power, Adani Total Energies, Statiq, Tata.ev and Reliance are the leading charging-network operators.

Battery swapping — particularly for two-wheelers and three-wheelers — is being pioneered by Sun Mobility, Bounce, Battery Smart and Yulu. The draft National Battery Swapping Policy proposes interoperable standards but is yet to be finalised.

Who is Building Electric Vehicles in India

The Indian EV market has consolidated around a small number of fast-moving players.

Two-Wheelers

Ola Electric (S1 and S1 Pro), Ather Energy (450X, Rizta), TVS (iQube), Bajaj (Chetak Electric), Hero MotoCorp (Vida), Greaves-Ampere and Okinawa dominate the electric two-wheeler space. Together they ship over 10 lakh units per year.

Three-Wheelers

Mahindra (Treo), Bajaj (RE Electric), Piaggio (Ape E-City) and Atul Auto lead this segment. Electric three-wheelers now account for over 60% of new three-wheeler sales in India — the deepest EV penetration of any segment.

Four-Wheelers

Tata Motors (Nexon EV, Tiago EV, Punch EV, Curvv EV) holds nearly 70% of the electric car market. Mahindra Electric (XUV400, BE 6 and XEV 9e on the INGLO platform), MG Motor (ZS EV, Comet, Windsor), Hyundai (Kona, Creta Electric), Kia (EV6, EV9), BYD (Atto 3, Seal) and BMW also operate in this segment.

Commercial Vehicles

Tata Motors, Mahindra, JBM Auto, Olectra Greentech, Ashok Leyland, VECV and Switch Mobility lead the e-bus and e-truck segment.

Reliance-BlackRock

Reliance Industries has announced a joint venture with BlackRock to develop battery technology, an EV platform and a full-stack mobility services business. The first vehicles are expected by 2027.

Lithium-Ion versus Sodium-Ion — The Battery of the Future

Today’s electric vehicles in India run almost entirely on lithium-ion batteries — primarily Nickel-Manganese-Cobalt (NMC) and Lithium-Iron-Phosphate (LFP) chemistries. Two structural challenges remain.

Lithium Supply

India has only modest known lithium reserves — Reasi in Jammu and Kashmir was identified by the Geological Survey of India in 2023, and Karnataka, Andhra Pradesh and Rajasthan are being explored. KABIL, a joint venture of NALCO, HCL and MECL, is acquiring lithium assets abroad in Argentina, Chile and Australia.

Sodium-Ion Promise

Sodium-ion batteries — using sodium instead of lithium — are emerging as a viable lower-cost alternative for low-range two-wheelers, three-wheelers and stationary storage. Indian research labs including IIT Bombay, IIT Madras and CSIR-Central Electrochemical Research Institute are working on sodium-ion cathodes. Reliance has acquired UK-based Faradion to anchor a sodium-ion supply chain.

Solid-state batteries, hydrogen fuel cells (linked to the National Green Hydrogen Mission) and pure-EV ICE conversion kits are other frontier technologies on the horizon.

Tax and GST Treatment

GST on electric vehicles is 5% — among the lowest concessional rates in the GST framework — compared with 28% plus cess for internal-combustion vehicles. Income-tax deduction under Section 80EEB allows up to ₹1.5 lakh annual interest deduction on EV loans. Several state policies — Delhi, Maharashtra, Tamil Nadu, Karnataka, Telangana and Gujarat — add registration and road-tax waivers and additional capital subsidies.

Challenges Facing Electric Vehicles in India

• Battery import dependence. Until PLI-ACC capacity comes online India will continue to import cells from China and Korea.
• Public charging gaps. Highway corridors and tier-2 cities remain under-served.
• Range anxiety and total cost of ownership. Real-world ranges for entry-level EVs still trail manufacturer claims, raising buyer hesitation.
• Insurance and second-hand market. Resale values are still being established and insurance products are nascent.
• Grid impact. Mass EV adoption will increase peak power demand by 50-100 GW — the grid needs simultaneous renewable expansion and smart-charging protocols.
• End-of-life batteries. India has only a draft Battery Waste Management framework. Recycling infrastructure must scale ahead of the first wave of retiring EV batteries from 2030 onwards.

Way Forward

Electric vehicles in India have crossed the inflexion point — penetration is now self-sustaining in two-wheelers, three-wheelers and city buses. The next decade requires three moves: aggressive scale-up of domestic ACC manufacturing under PLI, a contiguous national charging network with interoperable standards and grid-connected storage, and a robust second-life and recycling ecosystem for batteries. Combined with the green hydrogen push for long-haul transport and the semiconductor mission for in-vehicle electronics, electric mobility will be the central pillar of India’s clean-transport future.

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