This article is authored by Vivek Gavimath and Spurthi Ravuri, Centre of Study for Science, Technology and Policy ( CSTEP ).
The world is currently witnessing a widespread electric vehicle (EV) revolution. Improved air quality , because of the absence of tailpipe emissions, is one of the crucial benefits EVs offer. With over 22 million EVs, China is leading the revolution and successfully cleaning its air. Studies have shown that the scale of EV adoption in China has helped improve air quality in Wuhan, Beijing, Shanghai, and Shenzhen. Many Indian cities, including Delhi, have unhealthy air quality. As an evolving EV market, what could India learn from China in this space?
Since 2008–09, China has been implementing comprehensive policies at the national, provincial, and local levels to boost EV adoption and build domestic manufacturing capability and supply chains. Policy actions include sales mandates, purchase subsidies, tax incentives, charging infrastructure development, and manufacturing incentives. As a result, China had over 22 million EVs on the road in 2023, accounting for almost 40% of the country’s new car sales. Shenzhen, Tianjin, and Zhengzhou are among the provinces that have a 100% electric bus fleet in China.
China targets to have 45% of the new vehicle sales to be electric by 2027 and 80% EVs among new buses, taxis, and utility and logistic transport by 2025 in regions that need air pollution control measures. China also plans to completely electrify its public transit fleets (including taxis) in more than 30 cities. Provinces such as Beijing, Guangdong, Guangxi Zhuang, and Shanxi have targets of achieving 40% share of EVs in new vehicle sales by 2030. Provinces like Jilin and Hainan have gone beyond adoption targets to phase out diesel vehicles by 2030.
China has spent about INR 2.34 lakh crore on EV purchase subsidies from 2009 to 2022, offering INR 2.6 lakh (7.5% of the sales price) per car in 2009 and INR 1.5 lakh per car in 2022. Further, EVs are also exempted from vehicle purchase tax until 2025. Many provinces, like Henan, have further stimulated EV adoption by offering extra purchase subsidies (5% of the sales price). It is noteworthy that the scale of EV adoption in China is driven by its provinces to achieve the targets set at the national level.
Apart from these demand-side incentives, China has invested heavily in building a domestic battery manufacturing ecosystem, including securing raw materials for battery production. Such initiatives are crucial in reducing EV prices and driving mass adoption.
India’s policy landscape for EV promotion is similar but evolving with promising opportunities. Faster Adoption and Manufacturing of Electric (& Hybrid) Vehicles in India (FAME) Scheme (2015–2024) and the Electric Mobility Promotion Scheme (2024) were launched to bridge the high purchase cost of EVs. Under these schemes, purchase subsidies to the tune of INR 5,000–20,000 per kWh were provided, accounting for 10%–20% of the EV selling price. The government has cumulatively spent over INR 11,000 crore since 2015 (~1/20th of China’s spent), resulting in the adoption of over 4.5 million EVs. Over 16,000 charging stations are currently operational in India with the combined efforts of the government and private players. Additionally, on the supply side, to support local manufacturing, production-linked incentive (PLI) schemes were launched for EVs, EV components, and battery cells.
India has also been aggressively transitioning its urban public transport bus fleet. Over 5,000 e-buses have been deployed across cities with support from the FAME scheme and the Grand Challenge Initiative. Over 24,000 more e-buses are expected to be deployed under PM-eBus Sewa and the PM E-DRIVE schemes in the near future.
States in India have also been driving the EV movement through policies that incentivise the purchase of EVs, energy for charging, infrastructure development, and manufacturing. For example, Delhi’s purchase subsidies and the planned EV adoption mandates for fleet aggregators are driving aggressive sales of EVs in the state. However, most other state policies are not updated and renewed in a timely manner to align with the evolving national commitments, thereby slowing down the policy-driven EV adoption.
Recently, the PM E-DRIVE scheme was launched to focus on the further adoption of e-2Ws, e-3Ws, e-buses, e-ambulances, and even e-trucks. However, the exclusion of subsidies for e-4Ws, a segment that is already witnessing slow EV adoption could further hinder the growth in this segment.
Additionally, as India chases its global commitment of EV30@30, the absence of specific targets and mandates, as seen in China, providing demand assurance to the manufacturers is strongly reflected in the slow adoption of electric cars and commercial vehicles.
India’s EV promotion policies are comprehensive—albeit reserved in scale and budget—covering all key aspects of supply, demand, and infrastructure development. However, the scale and pace of EV adoption is lagging compared to global players. To see immediate air quality improvements through EV adoption, India will require ambitious adoption targets and mandates, supported by city-level implementation programmes.
Disclaimer: Views and opinions expressed in this article are solely those of the original author and do not represent any of The Times Group or its employees.
The world is currently witnessing a widespread electric vehicle (EV) revolution. Improved air quality , because of the absence of tailpipe emissions, is one of the crucial benefits EVs offer. With over 22 million EVs, China is leading the revolution and successfully cleaning its air. Studies have shown that the scale of EV adoption in China has helped improve air quality in Wuhan, Beijing, Shanghai, and Shenzhen. Many Indian cities, including Delhi, have unhealthy air quality. As an evolving EV market, what could India learn from China in this space?
Since 2008–09, China has been implementing comprehensive policies at the national, provincial, and local levels to boost EV adoption and build domestic manufacturing capability and supply chains. Policy actions include sales mandates, purchase subsidies, tax incentives, charging infrastructure development, and manufacturing incentives. As a result, China had over 22 million EVs on the road in 2023, accounting for almost 40% of the country’s new car sales. Shenzhen, Tianjin, and Zhengzhou are among the provinces that have a 100% electric bus fleet in China.
China targets to have 45% of the new vehicle sales to be electric by 2027 and 80% EVs among new buses, taxis, and utility and logistic transport by 2025 in regions that need air pollution control measures. China also plans to completely electrify its public transit fleets (including taxis) in more than 30 cities. Provinces such as Beijing, Guangdong, Guangxi Zhuang, and Shanxi have targets of achieving 40% share of EVs in new vehicle sales by 2030. Provinces like Jilin and Hainan have gone beyond adoption targets to phase out diesel vehicles by 2030.
China has spent about INR 2.34 lakh crore on EV purchase subsidies from 2009 to 2022, offering INR 2.6 lakh (7.5% of the sales price) per car in 2009 and INR 1.5 lakh per car in 2022. Further, EVs are also exempted from vehicle purchase tax until 2025. Many provinces, like Henan, have further stimulated EV adoption by offering extra purchase subsidies (5% of the sales price). It is noteworthy that the scale of EV adoption in China is driven by its provinces to achieve the targets set at the national level.
Apart from these demand-side incentives, China has invested heavily in building a domestic battery manufacturing ecosystem, including securing raw materials for battery production. Such initiatives are crucial in reducing EV prices and driving mass adoption.
India’s policy landscape for EV promotion is similar but evolving with promising opportunities. Faster Adoption and Manufacturing of Electric (& Hybrid) Vehicles in India (FAME) Scheme (2015–2024) and the Electric Mobility Promotion Scheme (2024) were launched to bridge the high purchase cost of EVs. Under these schemes, purchase subsidies to the tune of INR 5,000–20,000 per kWh were provided, accounting for 10%–20% of the EV selling price. The government has cumulatively spent over INR 11,000 crore since 2015 (~1/20th of China’s spent), resulting in the adoption of over 4.5 million EVs. Over 16,000 charging stations are currently operational in India with the combined efforts of the government and private players. Additionally, on the supply side, to support local manufacturing, production-linked incentive (PLI) schemes were launched for EVs, EV components, and battery cells.
India has also been aggressively transitioning its urban public transport bus fleet. Over 5,000 e-buses have been deployed across cities with support from the FAME scheme and the Grand Challenge Initiative. Over 24,000 more e-buses are expected to be deployed under PM-eBus Sewa and the PM E-DRIVE schemes in the near future.
States in India have also been driving the EV movement through policies that incentivise the purchase of EVs, energy for charging, infrastructure development, and manufacturing. For example, Delhi’s purchase subsidies and the planned EV adoption mandates for fleet aggregators are driving aggressive sales of EVs in the state. However, most other state policies are not updated and renewed in a timely manner to align with the evolving national commitments, thereby slowing down the policy-driven EV adoption.
Recently, the PM E-DRIVE scheme was launched to focus on the further adoption of e-2Ws, e-3Ws, e-buses, e-ambulances, and even e-trucks. However, the exclusion of subsidies for e-4Ws, a segment that is already witnessing slow EV adoption could further hinder the growth in this segment.
Additionally, as India chases its global commitment of EV30@30, the absence of specific targets and mandates, as seen in China, providing demand assurance to the manufacturers is strongly reflected in the slow adoption of electric cars and commercial vehicles.
India’s EV promotion policies are comprehensive—albeit reserved in scale and budget—covering all key aspects of supply, demand, and infrastructure development. However, the scale and pace of EV adoption is lagging compared to global players. To see immediate air quality improvements through EV adoption, India will require ambitious adoption targets and mandates, supported by city-level implementation programmes.
Disclaimer: Views and opinions expressed in this article are solely those of the original author and do not represent any of The Times Group or its employees.
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