The National Electric Mobility Mission Plan (NEMMP) aims to increase India’s Electric Vehicles (EV) fleet by 2030. To achieve this, the government has introduced incentives for manufacturers and buyers, including tax exemptions and subsidies.
With a population of over 1.4 billion people, India is one of the largest consumers of fossil fuels in the world. This has led to high levels of air pollution in many Indian cities, causing serious health problems for millions of people. In contrast, the rise of electric vehicles (EVs) as a rescuer against environmental pollution and the country’s heavy reliance on imported oil is welcomed by consumers as well as policymakers.
The demand for EVs has surged by over 100% since 2017, and the sector achieved 1.5-million-unit sales in 2023, marking a 46% year-on-year growth. The country’s EV market is expected to grow to 1 crore units annually by 2030, creating five crore jobs. Undoubtedly, the government has played a pivotal role in this transition through significant policy interventions.
Transition led by a clear vision
The government has undertaken several initiatives and made policy changes to support the players in the clean mobility sector. India’s vision for EVs encircle 7Cs – Common, Connected, Convenient, Congestion-free, Charged, Clean, and Cutting-edge.
To propel the EV transition in the country, the government is charting policies and regulations around these 7Cs. Further, the industry players welcome the decision to provide fiscal incentives to promote domestic EV manufacturing, including PLI schemes for Advanced Chemistry Cell battery storage and auto-components.
The National Electric Mobility Mission Plan (NEMMP) aims to increase India’s EV fleet by 2030. To achieve this, the government has introduced incentives for manufacturers and buyers, including tax exemptions and subsidies.
The Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) Policy, launched in 2015, provides direct subsidies and grants for specific projects, financial support for R&D, technology enhancement, and public charging infrastructure. The government is also working on developing charging infrastructure and promoting the installation of charging stations across the country to address the issue of charging infrastructure availability for EV buyers.
Government introduced FAME II scheme in 2019, which addresses gaps and challenges, allocating funds for EV charging station deployment. The government is also working with state governments, private enterprises, and international organizations to facilitate knowledge exchange and technology transfer.
The policy aims to support the widespread adoption of electric vehicles, incorporating sustainability, technology integration, and indigenous development. By implementing these policies, India aims to reduce its carbon footprint and assert global leadership in the rapidly growing EV sector.
Rippling effects of Make in India initiative
The ‘Make in India’ initiative, launched in 2014, aims to promote domestic manufacturing and boost economic growth in India. It focuses on the electric vehicle (EV) sector, aiming to reduce import dependence on EVs and components and boost domestic manufacturing capacity. The government has set ambitious goals for manufacturing EVs, including boosting domestic manufacturing capacity, creating job opportunities in the EV industry, and reducing import dependence.
To achieve these goals, the government has introduced incentives for EV manufacturing plants, reduced taxes on EVs and components, and promoted research and development in the sector. This has led to an increase in EV manufacturing plants, creating new job opportunities and boosting economic growth.
Additionally, the government has introduced training and skill development programs for workers, promoted entrepreneurship, and encouraged foreign companies to establish manufacturing plants in India. In conclusion, the ‘Make in India’ scheme has successfully attracted foreign investment and created job opportunities in the EV industry.
Improved safety regulations
The government has implemented regulations to ensure the safety and reliability of electric vehicle (EV) charging stations. These regulations cover technical standards, seamless power grid connection, and cybersecurity measures. Standardization is a key component in ensuring uniformity across the country. This promotes fair competition and simplifies the user experience.
The government aims to create a level playing field in the electric mobility sector, fostering trust and confidence among users. This also encourages investment and innovation in charging infrastructure. The regulations contribute to the growth and sustainability of the electric vehicle ecosystem in the country.
Budgetary support
The Indian government plans to expand the electric vehicle ecosystem by supporting charging and manufacturing infrastructure. Finance Minister Nirmala Sitharaman announced in her interim Budget that the government will encourage the use of electric buses for public transport networks.
Payment security mechanisms will be used to encourage greater adoption of e-buses. The government will also mandate the blending of compressed biogas into compressed natural gas for transport and piped natural gas.
Commendable efforts by states
State governments are also offering incentives to encourage electric vehicle (EV) adoption, such as exemptions from road tax and registration fees under the Himachal Pradesh Motor Vehicles Taxation Act and Tamil Nadu’s extension until December 2025.
These measures aim to reduce dependence on fossil fuels, encourage manufacturers to establish production facilities, and boost local employment and economic growth. Delhi and Maharashtra are also giving equal weightage to battery charging and swapping, benefiting battery-swapping startups by providing similar incentives.
Maharashtra’s Electric Vehicles policy aims to accelerate adoption and become an investment hub for EVs. The state has pledged INR 930 Crores for the policy until March 31, 2025, aiming to become the top producer of battery EVs and establish battery manufacturing plants. As per the policy, 2,375 public and semi-public charging stations will be developed across seven major urban areas and four connecting national highways.
Current challenges
India’s electric vehicle sector has promising sustainable growth, but challenges such as proper charging infrastructure, battery disposal and recycling, and safety regulations need to be addressed. To achieve clean mobility, robust electric vehicle policies are needed, including standardization of battery infrastructure, enforcement of safety standards, and uniform tax incentives. The high upfront cost of EVs and lack of awareness about their benefits are also significant challenges. To incentivize electric vehicle purchases, tax benefits and subsidies should be introduced, along with awareness campaigns.
R&D investments should continue, and every state should have a viable Electric Vehicles policy. The government should enable battery-as-a-service and swapping business models, enforce national scrappage policies, and promote charging infrastructure in public places. Subsidies for real estate for charging stations and battery swapping stations, along with clear guidelines and permissions, are also necessary.
