India boosts EV testing with ₹776 crore as e-two-wheeler penetration nears 10%

The Centre has approved ₹776.29 crore to upgrade EV and emerging-technology testing facilities, while raising PM E-Drive’s outlay to ₹11,900 crore and extending electric two-wheeler incentives through March 2028.

— Source publishedFri, 25 Sept, 2026, 21:13 IST·First seen Fri, 25 Sept, 2026, 21:22 IST·Source The Hindu BusinessLine

What happened

PM E-DRIVE · India’s electric two-wheeler penetration reached 9.9% in April-August FY27. The Centre approved ₹776.29 crore to upgrade EV testing facilities and

Key facts

  • ₹776.29 crore approved for EV and emerging-technology testing infrastructure
  • PM E-Drive outlay raised to ₹11,900 crore
  • Electric two-wheeler incentives extended until March 2028
  • Electric two-wheeler target increased from 24.8 lakh to 45.8 lakh vehicles
  • Electric two-wheeler penetration reached 9.9% in April-August FY27 versus 6.6% in FY26
  • Electric L5 three-wheeler penetration was 46.1% versus 31.7% in FY26
  • ICAT reported ₹142 crore profit last year

Why this matters

Prioritize alliances or acquisitions in EV distribution, charging, testing, battery services and embedded finance as public funding broadens the electric two-wheeler ecosystem.

What to watch

  • PM E-Drive operational guidelines, per-vehicle incentive levels, localization requirements and any revision to the 45.8 lakh vehicle target.
  • Monthly electric two-wheeler penetration, especially whether it sustains above 10% beyond incentive-heavy periods.
  • Certification turnaround times and the number of newly approved EV, battery, charging and component-testing facilities.
  • OEM dealer expansion, dealer closures, inventory discounting and financing-subsidy announcements.
  • Battery warranty claims, thermal incidents, recalls and insurance-premium changes.
  • Public and residential charging installations in tier-2 and tier-3 cities.
  • Interest rates, NBFC approval rates and used e-two-wheeler residual values.
  • State-level EV policy additions, road-tax waivers, registration fees and local charging mandates.
  • Expand e-two-wheeler assortments in high-penetration urban and tier-2 markets, prioritizing proven OEMs with dense service coverage and strong battery-warranty terms.
  • Bundle vehicles with helmets, security devices, portable charging accessories, insurance, financing and annual maintenance plans to capture higher-margin attachment revenue.
  • Build partnerships with lenders, insurers, charging operators and residential-property managers to reduce affordability and charging friction at point of sale.
  • Increase technician training, spare-parts stocking and battery diagnostics capabilities before sales volume creates after-sales bottlenecks.
  • Tighten inventory discipline by tracking model-level incentive eligibility, homologation status, delivery lead times, dealer funding costs and residual-value trends.
  • Target replacement demand from legacy ICE scooter owners with exchange offers, total-cost-of-ownership messaging and EMI-led promotions.

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