Niti Aayog Proposes National EV Policy with Defined Targets and Timelines for India

Niti Aayog has urged the Indian government to establish a National EV policy with specific goals and timelines to accelerate the country's shift to electric vehicles. The think tank's report, "Unlocking a USD 200 Billion Opportunity: Electric Vehicles in India," suggests expanding corporate average fuel efficiency (CAFE) norms to include more vehicle categories. The report was unveiled by Niti Aayog member Rajiv Gauba.

The report advocates for a regulatory framework with phased mandates for electric vehicles (EVs). It recommends a progressively stringent plan to mandate EV production and purchase while discouraging internal combustion engine (ICE) vehicle use. The Aayog suggests moving from incentives to mandates, as incentives have reached their potential, and stronger regulatory signals are now needed.

Focus on Infrastructure and Financing

To support this transition, the report proposes creating a pooled fund from public budgets and multilateral development banks. This fund would offer lower-interest loans for e-bus and e-truck procurement. Additionally, it recommends prioritising service delivery models over asset procurement, shifting capital costs to operating expenditures.

The report highlights the importance of scaling research and development efforts to reduce battery costs, improve energy density, and decrease reliance on imported rare earth materials. Strategic expansion of charging infrastructure and enhancing public awareness are also deemed crucial enablers by the Aayog.

Challenges and Recommendations

The report points out that VAHAN data does not accurately capture different categories of electric vehicles, complicating policy design, subsidy targeting, and progress monitoring. It suggests designing a new programme to saturate five cities with 100% e-buses, e-para-transit, and e-freight vehicles in urban areas.

Niti Aayog CEO BVR Subrahmanyam stated that the Aayog has been instrumental in facilitating India's ongoing EV transformation. "This report offers a timely and comprehensive review of current challenges, alongside actionable recommendations to fast-track the EV transition in India," he added.

Current Progress and Future Goals

India aims for electric vehicles to constitute 30% of all vehicles sold by 2030. EV sales in India rose from 50,000 units in 2016 to 2.08 million in 2024, compared to global sales of 9,18,000 units in 2016 reaching 18.78 million in 2024. Despite this growth, India's EV penetration remains below global levels.

The report notes that India's EV penetration was only about one-fifth of global penetration in 2020 but increased to over two-fifths by 2024. However, it remains slow compared to global trends. As of 2024, India has achieved only about 7.6% sales penetration, far short of its 30% target by 2030.

Rajiv Gauba remarked that India is on the brink of a significant shift towards clean mobility. "As the nation advances its electric mobility ambition, this report provides valuable insights and policy-aligned recommendations to overcome existing barriers and unlock scale," he said.

The report offers data-driven insights and identifies key actions needed for a faster national transition to clean mobility. It emphasises the need for coordinated efforts across various sectors to achieve these ambitious targets within the next five years.

With inputs from PTI