Waiting for the festive season to buy an EV? Cabinet approves PM E-Drive subsidising most EVs, sans electric cars

The electric vehicle (EV) market in India is evolving rapidly, and with the festive season approaching, many consumers are contemplating whether to wait for the usual festive discounts or take advantage of government incentives. One of the key schemes driving EV adoption has been the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) initiative in 2015, which is transitioning to phase 2 in 2019.

As per the recent announcement from the government, the government is replacing FAME II with a new scheme for the next two years. And no, it’s not FAME III!

PM E-Drive subsidy comes into effect

The PM E-Drive subsidy aims to build on the success of previous versions, where over 16 lakh vehicles benefited from FAME 2. However, unlike its predecessor which included subsidies for passenger EVs, PM E-Drive has reportedly limited subsidies to only two-wheelers, three-wheelers, buses, hybrid ambulances and electric trucks.

All in all, the scheme, with an outlay of Rs 10,900 crores, is expected to support 24.79 lakh electric two-wheelers, 3.16 lakh e-three wheelers, and 14,028 e-buses, along with a plethora of other features to improve the national e-mobility ecosystem. This also includes 22,100 fast chargers for e-4 Ws, 1800 fast chargers for e-buses and 48,400 fast chargers for e-2W/3Ws that will be set up in selected cities with high EV penetration and highways to allay the “range anxiety” of EV buyers.

More specifically, Rs 3,679 crores have been provided to incentivise e-2Ws, e-3Ws, e-ambulances, e-trucks and other emerging EVs. These incentives are expected to help reduce the upfront cost of electric vehicles, making them accessible to a larger segment of the population. Additionally, state-run bus companies will likely see increased support, further boosting the public transport EV ecosystem.As a result, PM E-Drive will particularly benefit individuals and businesses looking for two- and three-wheelers, as well as state transportation corporations. Small businesses that rely on electric three-wheelers for deliveries or passenger services could also see significant savings, which can be reinvested into their operations.

How does it compare to festival deals?

While the government subsidies under PM E-Drive offer substantial savings, festival season sales from EV manufacturers can provide additional discounts and promotions, such as reduced down payments, lower interest rates, and free charging infrastructure. However, these discounts are often limited-time offers and might not match the long-term financial benefits provided by government subsidies. For example, if you’re in the market for a two-wheeler EV, PM E-Drive incentives might be more valuable than a one-time festive discount of Rs 5,000 to Rs 10,000, based on the final discounts that automakers provide.

Additionally, manufacturers sometimes adjust their prices before offering festival deals, potentially reducing the actual discount. On the other hand, FAME subsidies are fixed and directly reduce the vehicle's purchase cost. Therefore, if you're primarily looking at entry-level electric vehicles like scooters or bikes, PM E-Drive might offer a more substantial and stable financial benefit than waiting for festive discounts.

Should you buy now or wait?

The decision to wait for the festival season or go ahead with the purchase largely depends on what you're looking for. If you're in the market for an electric two-wheeler or three-wheeler, the government subsidies under PM E-Drive — when they finally arrive — could be more beneficial than the temporary discounts during the festival season. However, if you're eyeing an electric car, especially a high-end one, the limited scope of PM E-Drive for passenger EVs might mean that festival offers provide better value.

If you’re contemplating waiting for the festival season to purchase an electric two-wheeler, these festive offers could stack up alongside the PM E-Drive subsidies, if automakers integrate the scheme into their pricing by then. Festival deals may even provide additional perks such as easy EMI options and free service packages, which aren't typically covered under government schemes. Therefore, it's worth evaluating both festive deals and FAME subsidies to maximise savings.

In conclusion, the launch of PM E-Drive brings a solid financial incentive to accelerate India's transition to electric mobility. Those considering two- or three-wheelers may want to act quickly as these subsidies roll out, while car buyers might want to weigh their options as the festive season approaches.