The Numbers
By every account, March 2026 was a breakthrough month for Indian electric two-wheeler sales, as volumes pushed past the 191,000 mark for the month and E2W penetration levels skyrocketed to 9.79%, the highest in history.
There was a lot of tailwind pushing the sales with the ongoing problems in the Gulf region and a likely fuel price hike coming. This pushed Indian customers towards electric scooters.
Caveat: India has not changed the pump prices at all.
Note: Based on news reports of the last twelve hours, it looks likely that we are heading towards a closure of the war in the coming week, and more ships are likely to pass through the Strait of Hormuz.
The other major factor that pushed sales up first was the likely closure of the PM E-Drive scheme at the end of the month.
Note: The scheme has now been extended to the end of July 2026.
So there were two major factors pushing sales, and by the end of the month, it looks like both are coming to an end or have been kicked further down the road.
Context: PM E-Drive
For context, especially for readers outside India, the PM E-Drive scheme is the eventual successor to the FAME II subsidy scheme. Under the present version of the scheme, all eligible electric two-wheelers get an INR 5,000 subsidy from the government. With the scheme likely to close this March, retail sales were aggressively pushed, riding on the fear of an upcoming price hike as the subsidy ended.
Is the PM E-Drive Important?
Yes and no. Electric vehicles in India get three types of subsidies, and the PM E-Drive is one of them. It is a direct subsidy that lowers the price by INR 5,000. However, it is the smallest benefit that electric two-wheelers get.
The biggest, by far, is the road tax exemption that EVs are getting in almost all states. As an illustration, let’s compare the Ather Rizta Z top model to the Honda NX 200 motorcycle.
Note: The comparison is not on technical specs, but more on the ex-showroom price of both vehicles. Both sit at around INR 155,000 ex-showroom in Bengaluru.
The PM E-Drive also pales in comparison to subsidies offered by some states (the third benefit), which can go up to INR 10,000.
So, coming back to the original question, is the PME drive scheme still so important? On the Ather Rizta’s on-road price, it is hardly 3%. But look at it from the customer’s point of view. That is 3% free money that he would have to pay extra if the buying decision were delayed. In many cases, it pushed fence-sitters planning a purchase in the near-term horizon to bring forward the purchase and complete it by the end of March.
Hence, the sales explosion in March.
Ground Report
In the last week of March, we did some ghost shopping at showrooms in Bengaluru, accompanying investors of a VC fund. The idea was to get a feel of the ground situation and whether the industry is doing any major discounting. Most manufacturers were doing moderate discounting. Ather was offering up to INR 4,000 in cash discounts on the Rizta. River offered an INR 1,500 discount.
In both cases, the showroom person emphasized the end of the PM E-Drive scheme and the INR 5,000 difference it would make to the prices.
Note: These discounts are not extraordinary. At about INR 4,000, the discount accounts for only 2.5% of the retail price, and that is a normal practice in the industry.
Extraordinary discounts were again offered by Ola, which, towards the end of the month, was offering certain models of its motorcycles and scooters at close to INR 50,000, an extraordinary price by any measure.
Market Shares
TVS continues to be the comfortable market leader with sales nearing the 50,000 mark this month, accounting for nearly 26% of the market. However, statistically, this was not the best month for TVS, as its lead over Bajaj narrowed significantly. Second-placed Bajaj Auto had a market share of 24.2%, bringing it within striking distance of TVS for the first time in many months.
Making a significant improvement in its market share was Ather Energy, which closed the month with 18.7% share of the market. Hero Vida had a market share of 11.22%, while Ola Electric is back at fifth place with a market share of 5.3%.
Ola’s sales again crossed the five-digit mark, riding on the above two factors, combined with aggressive discounts on many of its models. The company is also running a lucrative exchange scheme to bolster sales.
Will the Momentum Continue?
We wish we could say that. March was an outlier month, driven by fear and some more fear. Some of the fears have been pushed back by a few months, and the other fear may be going away for good. Yes, let’s say that March has been an extraordinarily strong month for E2W sales. We may see some pullback in April and May, but the base of the market is definitely shifting upwards.
Registration Data Snapshot
From this month, we will include this registration data snapshot in our report so that you can carry your own analysis as well.
