Govt should formulate national EV policy to unlock its $200bn potential: NITI Aayog

In a report titled "Unlocking a USD 200 Billion Opportunity: Electric Vehicles in India," Niti Aayog, on Monday, has requested the government to legislate a National Electric Vehicle (EV) policy to specify clear aims and timelines to promote clean mobility in India. 

In the study, Rajiv Gauba, a member of Niti Aayog, advocated for Zero Emission Vehicle (ZEV) regulations and a phased regulatory framework, Times of India reported. 

Citing Gauba, PTI reported, "Establish a national EV policy with clear targets and timelines... Announce a clear policy, with target timelines, for Zero Emission Vehicle (ZEV) adoption."

In addition, it suggested disincentives for internal combustion engine (ICE) vehicles and extending corporate average fuel efficiency (CAFE) standards to a larger vehicle market.

The report added, "Design a progressively more stringent plan for mandating the production and purchase of EVs and disincentivising the continued use/production of Internal combustion engine vehicles." 

According to TOI, noting the former results of incentives, the report added that it is now the right time to shift from financial incentives to regulations and disincentives. Additionally, it suggested focusing on legislative efforts for vehicle categories which has the greatest potential for EV adoption.

Highlighting the importance of affordability, the report suggested providing low-interest loans for the purchase of e-buses and e-trucks from a pool-based funding mechanism with investments by the public and the multilateral development banks. The Aayog additionally highlighted the importance of pushing service delivery models ahead of asset ownership and expanding research and development to lower battery costs, improve energy density, and lessen dependency on imported rare earths.

The report said, "Strategic scaling of charging infrastructure and enhancing public awareness and information systems are critical enablers". 

Moreover, it suggested promoting battery leasing options to help EV customers with their capital expenses.

The plan to "design a new program to saturate five cities with 100% e-buses, e-para-transit, and e-freight vehicles in urban areas" was another practical recommendation of the report.

An issue highlighted by the report was the lack of trustworthy VAHAN data across EV categories, which makes it difficult to create focused subsidies, policies, and monitor progress.

"India stands at the cusp of a transformative shift in clean mobility," Rajiv Gauba said.

He went on to say that the results provide insightful analysis and recommendations that are in line with policy to overcome the present obstacles and enable scaling.

As per TOI, although the progress remains stagnant, India has an ambitious aim to hit 30% EV penetration by 2030. The report claims that although global FV sales increased from 918,000 in 2016 to 18.78 million during the same period, FV sales in India increased from 50,000 in 2015 to 2.08 million in 2074.

India's EV percentage of total vehicle sales, which was only one-fifth of the global penetration in 2020, increased to more than two-fifths in 2024, according to the report. However, it cautioned that the rate is modest, since India's EV share was only 7.6% in 2024 and would need to rapidly increase to 30% in just five years.