Skip to content

Boosting EV growth in India: Missing pieces in the policy puzzle

A series of government policies in India have signaled a certain readiness to press forward with the vehicle-electrification agenda

A series of government policies in India have signaled a certain readiness to press forward with the vehicle-electrification agenda. But when shareholders of one of the most prominent electric vehicle (EV) manufacturers in the country, Mahindra & Mahindra, are not even aware of the company’s EV products, progress appears uneven, at best.

Indeed, model availability and consumer exposure to EVs remain critical challenges to overcome in the Indian market, which is still in the early stages of EV deployment compared with leading global markets. Nearly 50% of the world’s electric vehicle sales are concentrated in 25 global cities, and ICCT’s research shows that the “EV capitals of the world” all have comprehensive policy packages that include mandates in addition to financial incentives for consumers, funding for infrastructure development, and consumer-awareness initiatives. And this is what’s holding India back—the absence of an integrated, timebound set of regulations that can put electrification in the fast lane.

To get a sense of the key components of an effective EV policy roadmap for India, it’s helpful to examine the current promotional policies for EVs and then compare them with those in leading EV markets. The Government of India already provides several incentives that improve the cost-competitiveness of EVs relative to conventional vehicles. These include funding available through the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, reductions in goods and services tax (GST) rates on EVs and charging, and discounts on third-party insurance. Proposed policies include waivers for registration fees for EVs alongside steep hikes in fees for conventional vehicles. Several states, including Maharashtra, Karnataka, Telangana, and Delhi, have followed suit by announcing or proposing state-level policies with additional promotional measures for electrification. Several state electricity regulatory commissions have also announced preferential tariffs for EV charging.

On the infrastructure side, guidelines and standards for charging stations have been published, as have amendments to model documents that assist states and local bodies in urban areas with incorporating adequate charging infrastructure into buildings and urban master plans. Funding for public charging infrastructure is also available under the FAME scheme.

Additionally, there is the recent approval of the National Mission on Transformative Mobility and Energy Storage, which aims to localize the entire EV value chain. A phased manufacturing program for battery manufacturing at “giga-scale” is the highlight, and the goal is to have large-scale integrated cell manufacturing capacity in India by fiscal year 2021–22. For EVs to achieve cost parity with conventional vehicles, building and scaling domestic battery manufacturing capacity is going to be critical.

While these all appear to reflect a policy environment that encourages electrification, the absence of certain policies—particularly mandates—leaves ambiguity about the rate at which the Indian government is envisioning this transition. Governments in leading EV markets have incorporated mandates as the cornerstone of their EV deployment strategies to stimulate both supply and demand. These strategies include production mandates on manufacturers, mandates on fleet operators for a phase-wise transition to EVs, and mandates for EV shares in government procurement; they are applied alongside restrictions on conventional vehicle licensing and registration with preferential treatment for EVs, and low- and zero-emission zoning in urban areas with preferential access for EVs. Many of these policies directly impact priority segments in urban transit such as taxis, ride-hailing vehicles, buses, and delivery vehicles, and they require 100% electrification of new vehicles in the 2030 timeframe. Several other policies impact an entire category of vehicles (e.g., all light-duty vehicles) and aim for 100% electrification over a longer period.

Please click here to view the full press release.

SOURCE: ICCT

Welcome back , to continue browsing the site, please click here