India’s Updated Electric Vehicle (EV) Policy (2024)

Policy Update
Srikkoni Basu

Introduction

India is going through an exciting transformation in how we think about transportation. With rising fuel prices, oil imports, diesel prices, pollution, climate change, and the need to reduce carbon emissions, electric vehicles (EVs) are becoming a sustainable alternative. India is also ahead in supporting this change by introducing policies, incentives, and initiatives.

The Government of India has launched the Updated EV policy, 2024, which is future-facing and focuses on building a sustainable ecosystem that supports electric mobility in all segments, from trucks to cycles. The Foundation of Electric Vehicles was based on the policies, FAME I and FAME II (Faster Adoption and Manufacturing of Electrical Vehicles).

It was clear by 2023 that EV sales were rising in the two-wheeler and three-wheeler vehicle segments. Battery imports were essential as India was heavily dependent on foreign batteries. The charging infrastructure also lagged behind the pace of EVs, creating hesitation for potential buyers. Large vehicles like buses, trucks, and ambulances had a significant decline in adoption. These gaps resulted in revising its approach by the Government of India in 2024.

PM e-DRIVE Scheme

One of the significant innovations in this policy was the PM e-DRIVE Scheme (MoHI), which aims to build a more inclusive and production-based EV system. The policy was launched in October 2024. The PM Electric Drive Revolution in Innovative Vehicle Enhancement is the centerpiece of this updated policy. Unlike years back, the incentives and policies were favoring the end consumers; the new policy shifts emphasis towards the domestic manufacturing of EV components, specifically batteries.

It recognises that affordability is the key. It helps the working-class consumers and small businesses who are looking for consumer investment. This policy also aligns with India’s ‘Self-Reliance’, ‘Atma Nirbhar’ or ‘Make in India’ initiative, and seeks to reduce the dependency on foreign imports. In the previous policy, as trucks and ambulances were not given enough emphasis in the EV landscape, it was necessary to improve the health sector and logistics.

State Government and the uneven growth of EV policy Implementation

In India, the State has an active role in transitioning the growth of EVs. While the Center is responsible for issuing guidelines, it is the state that is responsible for providing better infrastructure. Among all the states, Delhi and Maharashtra are the frontrunners in promoting Electric Vehicles. The buyers in the National Capital benefit from waivers on road tax and registration fees, which reduce the total cost of owning an EV.

The Delhi Transport Corporation is the prime example for other Indian cities. Maharashtra has also taken steps by removing 6% road tax, which costs above Rs. 30 lakh, a category which is for premium cars like Tesla, Mercedes EQ, and Audi e-Tron. This makes Maharashtra attractive to the upper-middle class of society to switch to EVs without facing any additional cost.

However, in most states, basic infrastructure is not up to the mark, which makes the buyer hesitant, as the battery will run out. Without more inclusivity and a geographically balanced policy, India’s goal of widespread EV adoption may stay confined to small cities and towns.

Charging infrastructure for EV: Building the Backbone

For any country aiming to shift from conventional fuel vehicles to electric vehicles, having a strong and widespread infrastructure is a necessity. The users need access to safe, reliable, and fast-charging stations to make ownership practical. The Government of India has prioritized charging infrastructure under national-level schemes. Under FAME II, the government has approved 2877 public charging stations across the country by 2022, and it now has an ambitious target of crossing 5000+ charging stations by 2026.

To address the issue of “range anxiety”, the GOI has introduced National Highway EV Corridors where fast charging stations are to be installed every 50 kilometers on every highway by 2027. Some corridors like Delhi- Jaipur, Bangalore- Chennai, and Mumbai- Pune are already under construction. Smart cities like Pune, Bangalore, and Hyderabad are experimenting with the smart grid, connecting charging stations that can optimize energy use and charge during the off-peak hours when electricity is cheaper.

Battery swapping Policy allows users to exchange their batteries with fully charged ones in a minute. It is mainly useful for two-wheeler and three-wheeler vehicles, which cannot wait for long queues.

One of the strategic moves of this Update EV Policy (2024) is removing import duties from 35 battery components and 28 mobile phone parts, which overlap with the EV technology. The Government of India aims to encourage domestic production, reduce overall costs, and boost employment. Although the batteries of EVs are made from rare materials- Nickel, Cobalt, and Lithium, the majority of which are imported or whose extraction is hazardous for the environment. If mining these materials is not done properly, it will lead to ecological damage and uproot local communities.

Challenges that Remain

Despite all these efforts, some limitations are still seen. Low electric supply and grid stability remain concerns, a lack of skilled manpower, the cost of setting up the large infrastructure is high, and private players need subsidies or land allotments to make it more viable. Some cities have abundant land, and some cities have none. This uneven distribution is a huge challenge for potential buyers. To make it a success, the Centre must collaborate with the state to encourage public-private partnerships and increase investment in research and development for faster, cheaper, and sustainable charging stations.

Future Policies and Green Goals

To truly transform the nation’s system, the government is planning a new wave of policies. These future policies are designed to have better mobility, battery recycling, and to smooth long-distance EV travel, all while keeping inclusivity, economic, and socially responsible.

Green Urban Transport Fund (GUTF)

One of the most awaited policies, expected to be launched by 2026. This is specifically targeted to the Urban public transport sector, which is a major contributor to the air pollution in Indian cities. The goal is to replace old diesel buses with new e-buses by not just making them eco-friendly but also budget-friendly.

Battery Recycling and Second Life Use Policy

This policy will focus on issuing legal guidelines and environmental standards for safe disposal, encourage firms to set up battery collection centres, and promote the use of second-life batteries.

These policies show that India is planning a green, connected, and circular future rather than merely solving the issues of EVs. The government is handling the challenges of air pollution, inter-city travel restrictions, and battery waste.

Conclusion

India’s Updated EV Policy 2024 is not just a collection of subsidies but a serious attempt to reshape the future of transportation. By including heavy-duty vehicles and buses, supporting private firms, planning long-term infrastructure, and providing solutions for the limitations of earlier efforts, India is actively moving forward to achieve milestones.

However, transition is not quite as easy as it seems; challenges will remain, but to overcome them, India needs inclusive planning, better coordination, and continued investment in research and technological advancement. Still, this policy is a turning point for India, and it is aiming to lead it.

References

NITI Aayog. (2023). Electric Vehicles: Charging Infrastructure in India. https://www.niti.gov.in/sites/default/files/2023-05/Final-smaller_Electric-Vehicles-Charging-Infrastructure.pdf

Indian Express. (2024, February 22). India to build 5,500 km of e-highways by 2027. https://indianexpress.com/article/business/india-build-5500-km-e-highways-2027-ev-abhijeet-sinha-explains-9972739

NITI Aayog & ADB. (2023). Electric Vehicle Financing in India
https://www.niti.gov.in/sites/default/files/2023-07/ADB-EV-Financing-Report_VS_compressed.pdf

The Times of India. (2024, May 6). Revamped EV policy hopes to create 20,000 jobs in Delhi with an expanded charging network.
https://timesofindia.indiatimes.com/city/delhi/revamped-ev-policy-hopes-to-create-20000-jobs-in-delhi-with-expanded-charging-network/articleshow/121038038.cms

The Times of India. (2024, May 15). Watt Next? EV Charging Station at Every 5km. https://timesofindia.indiatimes.com/city/delhi/watt-next-ev-charging-stn-at-every-5km-stretch/articleshow/121374928.cms

Clean Mobility Shift. (2024). Plugging into a Green Future: India’s Electric Vehicle Boom Powers Ahead in 2024.
https://cleanmobilityshift.com/policy-regulation/plugging-into-a-green-future-indias-electric-vehicle-boom-powers-ahead-in-2024
Press Information Bureau, Government of India. (2024). PM E-DRIVE Scheme and Policy Details.

Ministry of Heavy Industries, Government of India. (2024). FAME II Scheme Updates.

Delhi Government Transport Department. (2024). Delhi EV Policy 2.0. https://transport.delhi.gov.in
Maharashtra State EV Policy. (2024). Maharashtra Electric Vehicle Policy and Road Tax Notification. https://evpolicy.maharashtra.gov.in

About the author

Srikkoni Basu is a post-graduate student in Development Studies from Dr. B.R. Ambedkar University, Delhi, and an intern at IMPRI, with field work experience in SEVA, Kolkata, in the Gender, Self-Help Groups, Education, and Livelihood sector.

Acknowledgement: The author extends his sincere gratitude to the IMPRI team and Ms. Aasthaba Jadeja for her invaluable guidance throughout the process.

Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.