Meeting India’s EV transition goals: challenges and opportunities

The government is working tirelessly to eliminate manufacturing and EV adoption barriers in India. While there are some challenges regarding uniformity of subsidies, regulatory policies, and so on, we must remember that India is still in the early stages of the EV revolution. Many areas for improvement are already being addressed through policies such as PLI and FAME 2. The government recently stated its intention to eliminate the current price parity between EVs and ICEVs to incentivise users further to choose electricity, who are currently deterred only by the high upfront cost.

The policies implemented over the years, from MNRE to FAME 1 and FAME 2 to PLI, have given the industry, OEMs, component manufacturers, technology firms, and end users alike a phenomenal boost, and all have benefited significantly, causing the shift and acceptance of EVs in India that we see around us today. We anticipate and are confident in the government’s goal and commitment to India’s transition to electricity.

In Delhi, for example, a 4KWH HSS E2W costs ₹ 165,000 but receives a central subsidy of ₹60,000, bringing the purchase price down to ₹99,999. Furthermore, Delhi’s state subsidy allows for an additional INR 22,000 subsidy on the same vehicle, bringing the effective cost to the consumer to ₹77,000. This makes the vehicle’s pricing appealing to the end user. However, this does not apply to a consumer purchasing the same vehicle in Bihar, which has the FAME 2 subsidy but lacks the additional luxury of an ₹22,000 reduction.

To ensure absolute price uniformity at the highest possible subsidy returns, a pan-India state-level fixed policy must be implemented to ensure uniform sales regarding pricing, which has otherwise forced OEMs to hold back supplies and manufacturing in states where policies regarding sales and or manufacturing are unfavourable.

When we consider the current challenges and growth of the Indian EV industry, we can see that only a few brands, including Okaya, have begun designing and manufacturing their vehicles. R&D, mould making, raw material procurement, patents, and liquidity flexibility in future models remain slow and costly. Although these elements

Expertise shared by Anshul Gupta, Managing Director, Okaya Electric Vehicles