India's Electric Vehicle (EV) Transition
The focus of India's EV journey has shifted from deciding whether to adopt electric vehicles to planning the transition strategy post-subsidies. Currently, subsidies for electric 2-wheelers (e2Ws) under the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme are set to end by March 31. This marks a crucial shift for the sector, highlighting the need for self-sustaining growth.
Key Issues and Challenges
- Subsidy Structure:
- The scheme's kWh-linked subsidy approach might encourage larger battery capacities over efficiency, leading to potential inefficiencies and increased import dependencies.
- Consumer Protection:
- Ensuring consumer protection through certification and validation is crucial, especially as the market grows rapidly with thin margins.
Proposed Solutions
- Efficiency:
- Implement road-tax waivers for commercial 3-wheelers and prioritize performance-linked criteria.
- Introduce a Bureau of Energy Efficiency 'star rating' system for vehicles, encouraging competition on energy efficiency.
- Reliability:
- Develop a transparent reliability dashboard for warranty and after-sales data to build consumer trust.
- Finance:
- Utilize risk-sharing structures for EV loans, with examples like Sidbi's partial risk-sharing facilities.
- Localisation:
- Focus on local manufacturing through schemes like the Phased Manufacturing Programme (PMP) and Production Linked Incentives (PLI) for auto components and battery storage.
Global Examples
- California's ZEV Regulation: Encourages market growth through manufacturer obligations and credit frameworks.
- China's Dual-Credit Approach: Accelerates adoption without compromising on efficiency.
India should develop a robust framework based on rules, data, and trust to ensure a successful transition to a post-subsidy era, learning from global examples but tailoring them to local needs.
