Niti Aayog urges shift from incentives to mandates for EV push
on Monday called for a strategic pivot in India's electric vehicle (EV) policy, urging a transition from reliance on incentives to a regime of mandates and disincentives, alongside a regulatory framework to accelerate adoption in high-potential segments and geographies.
In its new report titled
'Unlocking a $200 Billion Opportunity: Electric Vehicles in India'
, the policy think tank said the country must adopt a more aggressive and targeted approach to achieve its goal of 30 per cent
EV penetration
by 2030,
Economic Times
reports. In 2024, EVs accounted for just 7.6 per cent of total vehicle sales — about 18.78 million units — necessitating a compounded growth of over 22 per cent annually over the next five years.
Call for National EV Policy and Urban Electrification
To unlock this opportunity, the Aayog has recommended the establishment of a national
EV policy
with clear targets, timelines, and phased EV mandates. It also advocated pilot programmes to electrify 100 per cent of buses, paratransit, and freight vehicles in five urban areas as demonstration models.
The report highlights the need for prioritising service delivery models over asset-heavy procurement, with a shift in expenditure patterns from capital costs to operating costs. This would enable faster fleet transitions while easing the financial burden on public and private sector operators.
Financing, R&D and Infrastructure Critical
The Aayog has also proposed the operationalisation of a blended finance facility to lower capital costs for commercial EVs, particularly for
electric buses and trucks
— two segments that currently face challenges in financing and adoption.
Further, it called for scaling domestic R&D to reduce dependence on imported rare earth materials, improve battery technology, and enhance energy density. Expanding the Corporate Average Fuel Efficiency (CAFE) norms to cover more vehicle segments was also recommended as a regulatory enabler.
'Strategic scaling of charging infrastructure and enhancing public awareness and information systems are critical enablers,' the report stated.
The proposals come amid growing concerns over India's slow EV penetration in certain categories, particularly electric trucks and four-wheelers, even as electric two-wheelers and buses gain traction.
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