Electric Vehicle Policy and regulatory framework in India

Electric Vehicle Policy and regulatory framework in India


India pledged at COP26 to achieve net zero emissions by 2070, a goal that will need numerous legislative and regulatory initiatives to lower carbon emissions. A sizable amount of the nation’s carbon emissions are brought on by the transportation industry. Numerous initiatives in the market have encouraged diverse business justifications for new low-carbon mobility ventures while also enabling technological progress. Many businesses have committed to fleet electrification and new business models with electric fleet demand aggregation for the passenger and logistical segments, complementing government efforts. In this blog, we will understand the electric vehicle policy drafted by the government of India to promote electric vehicle sales.

Many entrepreneurs are making technological and commercial advancements that give people hope that EVs are a practical method of decarbonizing transportation.

Accelerating EV adoption – the key to achieving net zero emission targets from transport

With the progressive steps the government has taken to deploy EVs, Niti Aayog has set aspirational targets for all vehicle sectors for EV penetration by 2030. With a specific subsidy as part of the FAME scheme for the electrification of the public bus fleet, India has seen steady growth in EVs over the past ten years. The Indian government has developed several policies and regulatory measures for each ecosystem participant to boost the EV ecosystem.

Electric Vehicle Policy and regulatory framework in India


EV policies and regulatory interventions in India have effectively influenced decarbonization

State EV policies with a focus on supply, demand, and meeting particular needs exist in addition to the FAME program, which is intended to support statewide fleet electrification. All of these tools for policymaking are positive steps. India has to boost the percentage of electric vehicles in its fleet, which is now less than 1%. The objectives and goals established at the national level or by other institutions serve as a major driving force behind the current electrification initiatives. All passenger and fleet categories have plenty of room to increase EV adoption, which can support decarbonization efforts.


Accompanying measures to support policy efforts will be key to augmenting India’s EV penetration

For EVs to be competitive against conventional automobiles, the government must make major efforts to raise EV demand and viability. To maintain the long-term financial and operational viability of electric mobility, a supportive regulatory environment is required. To improve the commercial and technological viability of EVs, there is a chance to build incubation facilities as well as research and development centers.

The demand for qualified staff intensifies as the EV sector develops. To design, develop, and run EV systems including battery management systems, traction motors, and other components, skill development measures include a switch from mechanical to electro-mechanical proficiency development. To strengthen the workforce, prestigious institutions like the IITs have established EV-specific courses.

A modern Center of Excellence (CoE) for Electric Vehicles (2W, 3W, passenger cars, and commercial vehicles) and its components, such as traction batteries, controllers, chargers, motors, etc., has been built by the Automotive Research Association of India (ARAI). It aids in the government’s objective to promote electric mobility. It may be advantageous to invest in research and development infrastructure for EV and EV Supply Equipment (EVSE) design and manufacturing innovations with solutions that address India’s particular needs.

The maintenance ecosystem, which includes the supply chain for parts and battery components, will be essential because EVs are still a relatively new technology. Interoperability issues are getting worse as more technologies become available. Due to the lack of uniformity in battery and charging infrastructure, this could result in long-term asset and technological issues. The high upfront cost of EV adoption is a significant barrier, but it is now addressed by EV policies that offer incentives for both the purchase of vehicles and the installation of charging infrastructure.

The adoption of EVs will be helped by the financial ecosystem’s accelerated development. EV-specific credit products have been introduced by banks, and international financial institutions and non-banking financing companies in India are helping the electrification of public fleets even though there are currently few funding options available. The nation needs to focus on battery reuse and recycling procedures, which are still in their infancy.


The policy and regulatory instruments in India are well positioned to enable a holistic EV ecosystem

To lower up-front expenses and improve the dependability of the charging infrastructure, India’s EV policies can be strengthened further. Emerging technologies like battery swapping can be adopted through interoperability and indigenization. The workforce must increase its skills if the ecosystem is to be strengthened. Financing institutions play a crucial role in fostering the EV ecosystem’s growth and realizing its full potential in the rapidly expanding Indian EV market. To reach the net-zero goals and decarbonize transportation, the EV ecosystem requires a policy revolution involving a concerted effort from all significant stakeholders.

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