By Deepti Gulati

Introduction

The EV Policy of India aims to accelerate the adoption of electric vehicles (EVs) across the country, promoting sustainable transportation and reducing carbon emissions. This policy, initiated by the Ministry of Heavy Industries and Public Enterprises in 2015, focuses on various incentives for both manufacturers and consumers to enhance the EV ecosystems.

Background

The EV Policy was introduced to address India’s growing pollution levels and dependence on fossil fuels. The government aims to achieve a significant penetration of electric vehicles by 2030, targeting 30% of all vehicles to be electric. This initiative encompasses various segments, including two-wheelers, three-wheelers and four wheelers and is supported by the Faster Adoption and Manufacturing of Hybrids and Electric Vehicles (FAME) schemes. [1] [2].

Key Features:

1. Incentives to manufacturers:  The Indian government offers a range of financial incentives, to manufacturers under the new EV policy, including subsidies for battery manufacturing and infrastructure development. This is part of the broader strategy to attract investments from global EV companies and establish India as a manufacturing hub for electric vehicles. Additionally, the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) plays a crucial role in this initiative. FAME 1 was launched in 2015, provided Rs 895 cr to support electric vehicle adoption, While FAME 2 was initiated in April 2019 with an increased budget of Rs. 11,500 cr. Focuses on enhancing the availability of electric vehicles and charging infrastructure across the country. [3] [4] [8]
2. Consumer Subsidies:  Consumers can access various direct subsidies when purchasing electric vehicles. Under FAME 2, subsidies for electric two-wheelers are set at Rs 10,000 per kWh of battery capacity, capped at 15% of the vehicle’s ex-factory price. For electric three-wheelers the same subsidies apply. Additionally, several states offer special incentives, for example, Delhi provides up to Rs 15,000 for specific EV models and scrapping incentives for old vehicles. [4]  
3. Charging Infrastructure Development: The government aims to expand this network further to support this target of having 30% new vehicle sales as electric by 2030 addressing both urban and rural charging needs effectively. The policy emphasizes on creating a robust charging infrastructure, As of March 2023, India has over 6586 public charging stations making a substantial increase from approximately 1000 charging stations in FY –2021-2022. [4] [5]
4. State Led initiative: States are encouraged to formulate their own EV policies that align with the central government’s objectives for example states like Tamil Nadu and Gujarat have developed their own incentive structures to promote local manufacturing and consumer adoption. [5] [3] This decentralised approach allows states to tailor solutions that consider regional challenges and market dynamics.
5. Additional Incentives:  Beyond direct purchase subsidies various states provide incentives such as exemptions from road tax and registration fees for electric vehicles. Kerela offers complete exemptions on road tax for electric vehicles along with an income tax exemption up to Rs 150,000 on interest payments for EV loans.  [3]

Key Issues:

Despite its ambitious goals, The EV policy faces several challenges:

• Infrastructure Gaps: The lack of adequate charging stations remains a significant barrier to widespread EV adoption [6].
• High Initial Costs: While subsidies help, the upfront cost of electric vehicles is still higher than traditional vehicles, deterring some consumers [7].
• Battery disposal concerns: The environmental impact of battery disposal is a growing concern, necessitating robust recycling programs to manage end – of life batteries effectively.
• Regulatory Hurdles: Variability in state- level policies create confusion and inconsistency in implementation across different regions.

Recommendations:

 To enhance the effectiveness of the EV policy, several recommendations can be made:

• Strengthening Charging infrastructure: – Accelerate the rollout of charging infrastructure  through public-private partnerships to ensure widespread accessibility countries like Norway have successfully implemented extensive charging networks by incentivising private investments, resulting in over 8000 public charging points for a population of 5 million. India can adopt similar models to enhance its charging infrastructure, ensuring the stations are strategically located across urban and rural areas to alleviate  range anxiety among potential  EV  users.
• Consumer Education Programs:-   Implement comprehensive awareness campaigns to educate consumers about the benefits of electric vehicles and available incentives. For instance, the U.S Department of energy has launched initiatives that focus demystifying electric vehicles by providing clear information on their benefits addressing common misconceptions and promoting test drive opportunities.
• Developing Battery recycling frameworks:- Establish robust regulations for battery recycling to mitigate environmental risks associated with battery disposal. Country like Germany have implemented comprehensive battery recycling laws that require manufacturers to take responsibility for the entire lifecycle of their products by adopting such frameworks, India can ensure sustainable practices in battery management, reduce waste and recover valuable materials for re-use in new batteries.
• Streamlining  Regulations :-   Create unified regulatory framework that harmonises state policy with central objective to ensure consistency in implementation. The EU has successfully coordinated member states policies under its green-deal which facilitates seamless cooperation on EV adoption and infrastructure development.  India could benefit from a similar approach, ensuring that state-level initiatives align with national goals for electrification and sustainability.

In conclusion, while India’s EV policy represents a significant step towards sustainable transportation, addressing existing challenges are implementing recommended strategies will be crucial for achieving its long-term goals.

References:

1. India’s electric vehicle policy overview, “Ministry of heavy industries and public enterprises,2021.
2.  “FAME India Scheme”, Press Information Bureau,2021.
3. India’s New EV Policy: Eligibility Criteria and Key Initiatives”, India Briefing March ,2023.
4. “A review of A state and government policies for electric mobility”, WRICities India, 2022.  
5. “Sales growth in electric vehicles”, The Hindu Business line, 2023.
6. “Electric Vehicle Adoption Barriers”, Financial Express,2023.
7. “Cost Analysis of Electric Vehicles”, India Today, 2023.
8. “Government approves E-Vehicle policy for EV’s:  PIB,2023.
9. Electrifying India: Navigating the state EV policies for a sustainable future”, AEEE,2022

“Battery Recycling Initiatives”, The Indian Express,2023.

“State-Level EV Policies in India”,  LiveMint,2023.