The India Electric Mobility Council (IEMC) has called for the continuation of incentives in the electric vehicle (EV) sector, cautioning that discontinuing these benefits could result in a drastic reduction in EV sales.
The IEMC emphasized that without subsidies, EV sales could decline from an estimated 125 million units to 37 million units by 2030.
The government’s current FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme, which offers subsidies to EV manufacturers and buyers, is set to conclude in March next year.
Over 80 EV companies gathered to propose a comprehensive reevaluation of demand and supply factors impacting the industry post-FAME II scheme.
Expressing concern, the IEMC pointed out that reducing subsidies under the FAME II scheme for electric two-wheelers from Rs 15,000 to Rs 10,000 per kWh has led to a more than 50% drop in sales. The dependency on demand incentives was evident as sales surged in May with subsidies and declined significantly afterwards.
During May, the electric vehicle (EV) sector recorded sales of 105,299 electric two-wheelers. However, in the following month, the sales figures dropped significantly to only 46,003 two-wheelers, according to the data provided.
In July, the sales showed a slight improvement, reaching 54,176 units. Nevertheless, this figure remains approximately half of the sales achieved in May, highlighting the sector’s heavy reliance on demand-based subsidies. The role of subsidies as a vital catalyst for the EV ecosystem is evident from this data, emphasizing their significant impact on the industry.
According to the IESA analysis, with government support, the Indian EV industry could grow at a CAGR of 49% until 2030. In the best-case scenario, with demand incentives, EV sales in 2030 might reach 125 million units, but without them, they could plummet to 37 million units.
The industry also suggested including commercial trucks and fleet mobility segments, as well as considering construction equipment and tractors to stimulate growth.
Rahul Walawalkar, President of IESA and Chair of IEMC, stressed the need for a comprehensive approach that extends beyond subsidies, focusing on multiple enablers.
Sudhendu J Sinha, Adviser at NITI Aayog, requested stakeholders to think disruptively and offer recommendations for holistic solutions. The IEMC comprises various players from the automotive sector, including manufacturing, components, charging, and safety standards.
