We’re going electric! India’s Electric Vehicle Policy and Projections

According to WHO, India has some of the most badly polluted cities in the world and contributing to this pollution is vehicle traffic, both diesel and petrol. The Indian Government is slowly but surely being responsive to the burden of air pollution and climate change. At COP26, Prime Minister Modi committed to an ambitious goal of achieving 100 percent use of electric vehicles by 2030. That means that all cars that run on diesel and petrol, also known as Internal Combustion Engines (ICE), will not be allowed on the roads in India. How will India get there? The Government has already taken steps towards reaching this goal but a lot more needs to be done. At COP 26, Modi also revealed a new platform for information and policies on electric vehicles called e-AMRIT. This one stop portal will eventually have information for consumers, manufacturers, investors and policy makers to understand and work together to make this goal a reality in 2030.

My family has also decided that the next car we purchase will be an electric vehicle. But many questions remain. I tried to understand some of the complicated policies that India has implemented to make the use of electric vehicles easier. In 2019, the Indian Automotive Board launched FAME Phase II (Faster Adoption and Manufacturing of Electric Vehicles) built upon the previous Phase I of a policy with the same name. FAME Phase II committed to INR 100 billion ($1.3 billion) over three years on the demand side of electric vehicles. That is, money was spent on purchasing public transport EVs and building over 2000 charging stations in cities. On the supply side, the government is working through the National Mission on Transformative Mobility and Battery Storage (NMTMBS) to improve the technology and manufacturing capability of batteries and cells for EVs. So the demand side is looking at issues such as increasing battery life, to lower the cost of owning electric vehicles.

In addition to financial subsidies given by the central government, some states in India have also put in place their own rules and subsidies to defray the cost of buying electric vehicles. Delhi, where I live, has incentivized buying EVs with matching subsidies, and waving registration fees as well as road tax on the first 1000 EVs registered in Delhi. This is making my family’s decision to purchase an electric vehicle in 2022 all the more attractive.

With all these new policies and incentives, India is making the necessary policy changes to encourage the use of EVs but a lot more needs to be done. Both China and the US are spending billions on both the demand and supply side of the electric vehicle industry and India needs to step up their commitments.