Electric vehicles sales have crossed 1 million mark in India

In India, electric vehicles have been making headlines for all the right reasons. In 2022, this newly formed market segment passed the milestone of one million vehicles registered. While the rapid expansion of this market gives us much to be happy about, it is still not time for governments to stop providing subsidies. India has the potential to become a serious player in the EV market, but doing so will require tightening up EV regulations.

Using regulations and consumer incentives, some of the more developed EV markets in the world have expanded this market over the past few years. Recently, different tax credits for EV buyers were introduced in the US. The European Union (EU) relies on purchase subsidies; most recently, France raised its electric vehicles (EV) bonus to Euro 7,000 per vehicle.

In addition, nations have used tariff shields on energy prices and scrapping incentives to indirectly boost this market. In order to reach net zero by 2025, Norway was one of the first countries to implement purchase subsidies in 1990. As a result, Norway had an 80% market share for EVs in 2022.

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Over 21 lakh electric vehicles (EVs) have been sold in India to date, more than 10 lakh of which were sold in 2022 alone. However, the adoption of EVs in the automotive industry is still in its infancy. Only 4.7% of all vehicles sold in the country in 2022 were among the 10.09 lakh electric vehicles.

According to a recent study by the Centre for Energy Finance (CEF) of the Council on Energy, Environment and Water (CEEW), states that subsidised EVs saw a market growth that was twice as great as states that did not. Up to this point, 16 states have published consumer-facing EV policies, with Punjab publishing its most recent version in February 2023.

Electric two-wheelers, which made up 62% of all electric vehicles sold in 2022, have been at the forefront of the electric vehicles movement in India.

Electric Vehicles
credit: theprint

This group has consistently benefited the most from government policy support. Electric two-wheeler purchase incentives offered by national and state policies have played a significant role in lowering the price of this category. Given that price is still the biggest complaint among consumers, this support is crucial.

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States without EV policies and incentives must seriously consider implementing them in order to better develop their EV markets, and states like Delhi and Kerala whose policies are about to expire should think about renewing them.

The most recent example is the temporary ban on all diesel BS-IV vehicles in the city, which Delhi has occasionally used to control its spiralling pollution levels. Over the next few years, a cleaner and greener fleet of vehicles may be possible thanks to such restrictions, which could be implemented across many more Indian states.

India, the third-largest auto market in the world, has the potential to play a prominent role in the global EV transition. Policymakers at the federal and state levels must keep expressing their support for this expanding market segment and providing subsidies.

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