Over the previous 12 months, India’s electrical car (EV) coverage has undergone a quiet however important pivot: electrical automobiles are not centre-stage, whereas e-trucks have emerged as the brand new precedence.
The primary main sign got here in September 2024, when the PM E-DRIVE scheme was rolled out with none incentives for electrical four-wheelers — in contrast to the previous FAME subsidy. Earlier this week, the NITI Aayog bolstered this stance, arguing that measuring progress in e-mobility by way of automobiles is “not… the best metric” for India.
As a substitute, the federal government is now turning its consideration to electrifying vans, which make up simply 3 per cent of India’s car fleet however contribute a 3rd of all transport-related carbon emissions and over half of particulate air pollution. A brand new Rs 500-crore subsidy goals to help 5,600 e-trucks on Indian roads.
Regardless of help, electrical automobiles stay a tough promote
Electrical automobiles merely aren’t promoting quick sufficient in India to maneuver the needle — largely resulting from their comparatively excessive price and protracted vary nervousness. India’s progress in electrifying four-wheelers “has been weak in comparison with the worldwide situation,” the NITI Aayog report stated.
In 2024, the share of electrical automobiles in complete four-wheeler gross sales — or EV penetration — remained low at simply 2 per cent, in keeping with New York-headquartered assume tank Rhodium Group. In distinction, the EV penetration fee within the four-wheeler section stood at 47 per cent in China, 23 per cent in Europe, 10 per cent within the US, and a hanging 17 per cent in Vietnam — up from simply 3 per cent in 2022.
The sluggish tempo in India comes regardless of a number of tailwinds — the FAME scheme subsidised at a value of Rs 537 crore over 22,600 electrical automobile purchases between 2019 and 2024, a number of states provided highway tax and registration waivers, battery prices fell sharply, and a home EV provide chain took form below the PLI scheme for auto parts.
The volumes case in opposition to electrical automobiles
There’s one more reason — “Whereas 75% of Indian autos are two-wheelers, solely 13% of those autos are automobiles… Therefore, measuring progress within the transition to electrical mobility by solely taking a look at automobiles, as completed in developed international locations, wouldn’t be the best metric in a rustic dominated by two-wheelers,” the NITI Aayog report stated. Within the two-wheeler section, the EV penetration fee was 6 per cent in 2024-25, in keeping with JMK Analysis.
Story continues beneath this advert
Along with automobiles making up a smaller share of autos total, massive automobiles costing over Rs 10 lakh account for simply 2 per cent of India’s car fleet. When figuring out which segments most warrant coverage interventions to spice up supporting infrastructure, the report famous, “Private automobiles would come decrease down within the precedence primarily as a result of they compose a comparatively small share of the car fleet within the nation and day by day utilization can also be comparatively low.”
That stated, the federal government did launch the Scheme to Promote Manufacturing of Electrical Passenger Vehicles in India in March 2024 — which many had seen as aimed toward attracting Tesla — with pointers launched in June this 12 months. The scheme permits world automakers to import EVs at decrease customs duties — supplied they make investments no less than Rs 4,150 crore to arrange home manufacturing. Nevertheless, Tesla is “not curious about manufacturing in India,” Union Heavy Industries Minister H D Kumaraswamy had stated in June.
Incentives transfer from automobiles to vans
So far as decreasing emissions, particulate air pollution, and dependence on vitality imports is worried, electrification of vans will go a great distance. “The longer haul vans are an essential part of the highway transport system as they emit over 34% of the CO2 from the transport sector, regardless of constituting solely 3% of the overall car fleet. A big dent within the discount of GHG from highway transport is not going to be attainable with out transitioning lengthy haul vans to electrical,” the NITI Aayog report stated.
Electrical penetration within the truck section stays negligible — simply 0.7 per cent in 2024. Of the 8.34 lakh vans bought that 12 months, solely 6,220 had been electrical, and simply 280 had a capability above 3.5 tonnes — the type sometimes used for lengthy hauls, in keeping with the report.
Story continues beneath this advert
In July, the Ministry of Heavy Industries launched an incentive scheme for e-trucks below PM-DRIVE, aiming to help 5,600 autos with a capability of over 3.5 tonnes. The utmost incentive is ready at Rs 9.6 lakh per car, which is essential as e-trucks have very excessive capital prices. The scheme makes a particular provision for 1,100 e-trucks registered in Delhi to handle “the capital’s severe air high quality challenges”.
Earlier, in Could, the Workplace of the Principal Scientific Adviser recognized 10 routes to develop for zero-emission trucking (ZET) based mostly on excessive site visitors quantity, lively industrial development, enough ancillary companies, and grid infrastructure. These embody Chandigarh-Delhi-Jaipur, Dhanbad-Kolkata-Haldia, Bengaluru-Chennai-Villupuram, and Salem-Coimbatore-Kochi.
China is already displaying what electrification of trucking can do to grease consumption — with round 9 per cent of professional quality vans now electrical, it’s displacing over 1 million barrels per day in implied oil demand, in keeping with the Rhodium Group.