Autobayng News Team
EV subsidies, like Delhi’s ₹1 lakh benefit for 27,000 electric cars priced up to ₹25 lakh, are questionable on several counts.“>
Last year, India bought 1.8 lakh electric cars, 77 per cent over 2024. But in terms of overall car sales this amounted to just 3.8 per cent. Clearly, 10 years of govt incentives and subsidies haven’t convinced buyers of the advantages of going electric. Two reasons are obvious: range anxiety + inadequate charging infra, and high prices + limited choice at the lower end. Low sales, by global standards, aren’t allowing the Indian EV ecosystem to mature.
Which explains Indian carmakers’ dread of cheap Chinese EVs slipping in via EU after an FTA. But there’s a counterview. Let EVs of every ilk come in freely and cheaply.
Growing EV popularity will automatically spur growth of charging and servicing infra, which means more jobs. After all, countries that don’t make any cars at all, like Australia, also have well-developed fuelling and charging networks. This infra boost will serve domestic carmakers too if they raise their technology game with R&D, like China did.
But to go on pushing domestic EV sales with subsidies and mandates is pointless. For example, what will Telangana’s plan to make schools induct 25-50 per cent EVs in their vehicle fleets lead to? Greater burden on parents. Electric buses cost far more than those running on diesel or gas, and because school buses run for only a couple of hours daily, gains on the air quality front will be minimal. Far better to focus on city bus fleets that run from morning to night.
EV subsidies, like Delhi’s ₹1 lakh benefit for 27,000 electric cars priced up to ₹25 lakh, are questionable on several counts. Who gains from them? The rich. Who’s hurt by the revenue loss? The poor. Those crores are better used to ensure potable water and sewage don’t mix, right?
A Harvard Law School study found subsidies only encourage the rich to buy EVs as their non-primary vehicles, worsening urban congestion and pollution. Other studies have shown that when govt subsidises electric cars, manufacturers have no incentive to lower prices. Without subsidies, they would have to raise prices of their ICE cars to discount EVs themselves. Let the market work, and save public funds for the public.
Join the community of 2M+ industry professionals.
Subscribe to Newsletter to get latest insights & analysis in your inbox.
All about ETAuto industry right on your smartphone!
- Download the ETAuto App and get the Realtime updates and Save your favourite articles.
