India’s Accelerated Push Towards Electric Vehicle Adoption in FY25: Key Policies and Initiatives

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In a concerted effort to accelerate the adoption of electric vehicles (EVs) and enhance domestic manufacturing, the Indian government has announced several new initiatives targeting the Indian market.

These measures come as projections suggest that electric car sales in India could reach 1.5 lakh units in the current fiscal year (FY25). The adoption of electric two-wheelers is also surging, with e-2W sales soaring to 17,52,406 units in FY24.

This impressive growth, driven primarily by two-wheelers and three-wheelers, which contributed 94 percent to the total sales, underscores the country’s rapid shift towards electric mobility, according to the latest report by JMK Research and Analytics.

Key Initiatives

Electric Mobility Promotion Scheme (EMPS) 2024

Launched by the Ministry of Heavy Industries on March 13, 2024, the Electric Mobility Promotion Scheme (EMPS) 2024 is a pivotal initiative aimed at boosting the adoption of EVs across the country.

Initially set to run from April 1 to July 31 with a total outlay of ₹500 crore, the scheme has now been extended by two more months. The revised scheme will now run until September 30, with an increased budget of ₹778 crore.

This scheme focuses on:

• Subsidizing the adoption and manufacturing of electric two-wheelers (e-2Ws) and three-wheelers (e-3Ws), particularly those registered for commercial purposes.
• Supporting privately or corporate-owned registered e-two-wheelers.
• Aiming to support the deployment of 560,789 electric vehicles, including 500,080 electric two-wheelers and 60,709 electric three-wheelers.

By targeting these segments, the EMPS 2024 aims to foster a competitive, resilient, and efficient EV manufacturing industry in India, aligning with Prime Minister Narendra Modi’s vision of ‘Aatmanirbhar Bharat.’

New Electric Vehicle Policy 2024

Announced in March 2024 with an investment of US$500 million, the New Electric Vehicle Policy aims to attract global EV companies and position India as a leading manufacturing hub for electric vehicles. Key features of this policy include:

• Providing incentives to EV manufacturers to encourage domestic production.
• Capping the annual import of EVs to 8,000 units with a reduced customs duty to protect and promote local manufacturing.

This policy is designed to create a robust ecosystem for EV manufacturers and consumers, promoting substantial growth in the sector.

Additional Measures

Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (FAME) India Scheme

The ongoing FAME India Scheme plays a critical role in promoting electric and hybrid vehicles. This initiative provides significant subsidies and support to accelerate the adoption of EVs across various segments, making them a mainstream choice for consumers.

Expansion of Charging Infrastructure

To support the widespread adoption of EVs, the government is heavily investing in expanding the nationwide charging network. This includes setting up charging stations in urban centers, highways, and remote areas to ensure comprehensive coverage.

Battery Manufacturing Promotion

To reduce dependency on imported batteries and lower costs, the government offers incentives and support for domestic battery production. This measure aims to bolster the local supply chain and foster innovation in battery technology.

Research and Development in EV Technology

Significant investments are being made in research and development to advance EV technology. This includes funding projects that focus on enhancing battery efficiency, improving vehicle performance, and developing cost-effective manufacturing processes.

Creating a Favorable Environment for EV Growth

These multifaceted initiatives are designed to create a favorable environment for the growth of the EV ecosystem in India. By making electric vehicles more affordable, accessible, and convenient for consumers, the government aims to drive a substantial shift towards sustainable transportation.

This comprehensive approach not only addresses the current challenges faced by the EV industry but also sets the stage for long-term growth and innovation.

Encouraging Market Trends

According to the latest CareEdge Ratings report, the penetration of electric cars is consistently increasing in India, driven by the government’s efforts towards a more sustainable, environmentally friendly, and efficient transportation sector.

The shift to electric mobility extends beyond cars and trucks, with e-rickshaws and e-karts also gaining popularity across the country.

Electric bus sales have also seen a significant surge, reaching 3,708 units in FY24, marking an 85 percent year-over-year growth. This trend highlights the growing acceptance and integration of electric vehicles across various modes of transportation in India.

Conclusion

India’s aggressive push towards electric vehicle adoption in FY25 reflects its commitment to a greener and more sustainable future. Through targeted policies, substantial investments, and comprehensive support measures, the Indian government is laying a robust foundation for the EV sector.

As these initiatives take effect, they promise to transform the transportation landscape, reduce pollution, foster innovation, and position India as a global leader in electric mobility.