Centre, States Commit Over Rs 1.25 Lakh Crore for EV Ecosystem
Many have also offered capital subsidies, concessional land and tax exemptions to attract EV and battery manufacturing investments to their regions.
Chennai: The Centre and states have committed over Rs 1.25 lakh crore to incentivise the use of electric vehicles, finds Niti Aayog. By 2025-26, EV penetration in India reached 8.25% and 2.5 million vehicles were registered during 2025-26 alone - a growth of 25% over the previous financial year.
The Centre has committed more than Rs 90,000 crore, spread across several ministries and multiple fiscal years, towards public investment in demand incentives, charging infrastructure, bus electrification, manufacturing support and research.
This comprises Rs 24,000 crore across the FAME-I, FAME-II and PM E-DRIVE schemes; Rs 20,000 crore as central assistance through PM-eBus Sewa; Rs 44,000 crore for the PLIs on the National Programme on Advanced Chemistry Cell Battery Storage and on the Automobile and Auto Component Industry in India; Rs 3,435.33 crore for the PM-eBus Sewa Payment Security Mechanism; and Rs 1,150 crore for e-mobility-related research and development (R&D).
Besides the central subsidies, States and UTs have committed Rs 37,613 crore under PM-eBus Sewa for public transport electrification, layered their own EV purchase incentives onto the central FAME and PM E-DRIVE support, exempted EVs from road taxes and registration fees, eased commercial permit requirements, and backed charging infrastructure through fiscal and regulatory measures. Many have also offered capital subsidies, concessional land and tax exemptions to attract EV and battery manufacturing investments to their regions.
By 2025-26, EV penetration in India reached 8.25%, up from 0.5% in 2018. By 2025-26, more than 8.7 million EVs were running on Indian roads, and close to 2.5 million were registered during 2025-26 alone, a rise of about 25% over the previous financial year. Two-wheelers accounted for most of this volume at 1.3 million units, followed by passenger three-wheelers, while passenger cars held a modest and rising share of the total vehicles.
Commercial goods vehicles saw the sharpest growth across the electric light, medium and heavy-duty segments, where penetration climbed from 0.6% in 2024 to 1.4% in 2025. However, adoption of e-buses, which stood at 8.75% in 2021 has moderated to 6.4% by 2025.
The number of public charging stations touched 29,000 by June 2025. Vehicle assembly has scaled quickly, and localisation of the component supply chain is also deepening, although the development of domestic cell manufacturing has progressed slowly. Startups are working at the technical frontier on cell chemistries suited to Indian ambient temperatures, motor and power-electronics design, battery management systems, swapping networks and financing models for commercial fleets.