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INTERNATIONAL JOURNAL OF GLOBAL RESEARCH INNOVATIONS & TECHNOLOGY (IJGRIT) [ Vol. 4 | No. 2(II) | April - June, 2026 ]

Evaluating EV Market Growth in India During Policy Transitions (FAME-II to PM E-Drive)

Dr. Khushboo Prajapati

The Indian electric vehicle (EV) sector has witnessed rapid growth, heavily catalyzed by fiscal incentives under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-II) scheme. However, as the government transitions toward policy self-reliance, transitioning through short-term schemes like EMPS to the currently active PM E-DRIVE scheme, subsidy outlays per vehicle have been significantly tapered. This paper empirically evaluates the impact of these policy transitions on the market growth and resilience of the EV sector in India. Utilizing secondary data from the VAHAN dashboard and product pricing structures from the Society of Indian Automobile Manufacturers (SIAM), this study analyzes monthly registration volumes across key segments (2W, 3W, and 4W). The findings indicate a short-term "subsidy cliff" shock characterized by a temporary volume dip immediately following incentive reductions, followed by organic market recovery driven by total cost of ownership (TCO) benefits and brand diversification. The paper concludes with strategic insights for automobile marketers and policymakers.

  1. Center for Energy, Environment and Water (CEEW) Reports (2024-2025). Evaluating India's Electric Mobility Transition and Clean Energy Goals.
  2. Gallagher, K. S., & Muehlegger, E. (2011). Giving green to get green? Incentives and consumer adoption of hybrid electric vehicles. Journal of Environmental Economics and Management, 61(1), 1-15.
  3. Ministry of Road Transport and Highways (MoRTH). VAHAN Dashboard Central Database Analytics.
  4. Society of Indian Automobile Manufacturers (SIAM). Annual Automotive Industry Pricing & Performance Reports.
  5. Ministry of Heavy Industries. Official Gazette Notifications on FAME-II Tapering and PM E-DRIVE Operational Frameworks (2024-2026).

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