Electric vehicles (EVs) have emerged as a significant driving force for reducing greenhouse gas emissions and air pollution while contributing to the energy security of countries. The electric vehicle industry is expanding globally, with governments and automakers focusing on the development and adoption of these vehicles. However, the high cost of EVs and the lack of supporting infrastructure have been significant challenges to their widespread adoption. In this context, the role of government policies and incentives in driving the EV market is of great importance.
Governments worldwide have been setting increasingly stringent regulations to reduce carbon emissions and promote the adoption of cleaner energy sources. The adoption of EVs has been a significant component of these regulations, as EVs produce zero tailpipe emissions, reducing air pollution and contributing to a cleaner environment. In India, the government has set a target of 30% EV penetration by 2030 to reduce the country’s dependence on fossil fuels and cut down on carbon emissions. To facilitate this, incentives such as tax credits, rebates, and grants have been provided to reduce the cost of EVs and make them more affordable to consumers.
Incentives & Beyond
With the global EV market projected to grow significantly in the coming years, the role of government policies and incentives will only become more critical in driving the adoption of EVs. In India, the government introduced the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme back in 2015 to provide incentives to EV manufacturers and buyers. The scheme has been extended several times and has provided significant support to the EV industry in India.
While incentives are a great and lucrative option to excite both customers and manufacturers to accelerate EV adoptions, it is also important for the government to take other aspects into consideration. One of that is the crucial role the government plays in establishing the charging infrastructure necessary for even more widespread adoption of EVs.
The Government of India has been working to establish a robust network of charging stations and setting up policies and regulations to encourage private players to invest in charging infrastructure. Infact, it also announced an allocation of INR 40,000 crore (approximately USD 5.3 billion) for the development of electric vehicle infrastructure in the Union Budget 2023.
This initiative aims to establish a public charging station every 25 kilometers on highways and every three kilometers in cities and towns. Furthermore, the government has also proposed reducing GST (goods and services tax) on EVs to 5% from the current 12% to make EVs more affordable.
Creating A Sustainable Future.
Thanks to the constant push by the government, by supporting the growth and adoption of EVs through policies and incentives, the future of the EV market looks promising. As a direct effect of this, the global EV market is projected to grow significantly in the coming years, with an estimated 40 million EVs on the road by 2030. The success of these government initiatives will play a crucial role in achieving this growth.
The Indian EV industry, in particular, is expecting significant growth with the government’s recent initiatives. The Union Budget 2023 has provided strong support to the EV industry with measures such as the allocation of INR 40,000 crore for EV infrastructure, reducing GST on EVs, and introducing a voluntary scrappage policy to encourage the adoption of EVs. These initiatives will help reduce the cost of EVs, establish a robust charging infrastructure, and promote the adoption of cleaner energy sources in India.
(The author is Mr. Pritesh Mahajan, Co-founder, and CEO of Revamp Moto, and the views expressed in this article are his own)
