India's electric vehicle journey so far: A story of nudges and trudges

Business Standard chronicles India's efforts over the years to push a faster adoption of electric vehicles.

The concept of electric vehicles (EVs) has been around for a fairly long time, but it has drawn significant interest only in the past decade. While rising carbon footprint and other environmental impacts of the fuel-based vehicles have nudged policymakers the world over to look seriously at EVs, India’s efforts have so far yielded very little.

The country made its first concrete decision to incentivise EVs in 2010, when, under a Rs 95-crore scheme approved by the Ministry of New and Renewable Energy (MNRE), the government announced financial incentives for manufacturers of electric vehicles sold in India.

Since then, the central government has taken several steps to get more Indians to adopt EVs, first under Prime Minister Manmohan Singh and then under Narendra Modi. Here is a timeline of events in the country’s EV journey so far:

November 2010: The Manmohan Singh-led United Progressive Alliance government announces a scheme with an outlay of Rs 95 crore to incentivize electric vehicles. The scheme envisages incentives of up to 20 per cent on ex-factory prices of the vehicles, subject to a cap.

March 2012: The Ministry of New & Renewable Energy (MNRE) discontinues the Rs 95-crore subsidy scheme causing a 70 per cent drop in EV sales, according to manufacturers, besides temporary or permanent closure of several dealerships.

2013: India unveils the 'National Electric Mobility Mission Plan (NEMMP) 2020' to make a major shift to electric vehicles and to address the issue of national energy security, vehicular pollution and growth of domestic manufacturing capabilities. The scheme is to offer subsidies and create supporting infrastructure for EVs.

2014: In two years of the March 2012 discontinuation of subsidy on EVs, electric two-wheeler sales crash to a mere 21,000 units a year (from 100,000 two years earlier). As many as 960 distributors of e-bikes — nearly half the total number of dealers in the country in 2011-12 — shut shop during the period. Worse, 26 of the 35 major electric two-wheeler makers during the peak sales period (between November 2010 and March 2012) are out of business due to poor demand.

Business Standard