Electric Mobility Beyond Subsidies

India's electric vehicle (EV) transition has entered a decisive phase. What began with the National Electric Mobility Mission Plan in 2013 and gathered pace through FAME-I (2015), FAME-II (2019), and the PM E-DRIVE programme (2024) has evolved into one of the country's most ambitious industrial and climate policy initiatives. Along with the Production Linked Incentive (PLI) schemes for automobiles and Advanced Chemistry Cell (ACC) batteries, the Union government has committed over ₹70,000 crore to accelerate electric mobility. More than 16.7 lakh EVs have received incentives under FAME-II, nearly 9,600 public charging stations have been installed, and thousands of electric buses have been sanctioned. The question today is no longer whether India should adopt electric mobility, but whether it is building a globally competitive EV ecosystem or merely an incentive-driven EV market.

The government's strategy has progressively shifted from stimulating consumer demand to promoting domestic manufacturing. Reduced GST on EVs to 5%, incentives for advanced battery manufacturing, support for charging infrastructure, green number plates, and tax concessions have expanded the market while seeking to reduce oil imports, improve air quality and strengthen India's manufacturing base. These initiatives deserve recognition. Yet, policy success must be judged not by expenditure or vehicles sold, but by whether electric mobility becomes economically self-sustaining.

The first challenge is the continued dependence on subsidies. Incentives are indispensable during the infancy of any emerging technology, but they cannot become a permanent business model. As long as demand rises primarily because of government support rather than falling production costs, technological innovation or market competitiveness, the transition remains fiscally fragile. The real test is whether the industry can thrive when subsidies are gradually withdrawn.

A second weakness lies in charging infrastructure. Although thousands of public charging stations have been established, their distribution remains heavily skewed towards metropolitan areas. Large stretches of highways, smaller cities and rural regions continue to lack reliable charging facilities. Fast chargers remain inadequate, interoperability across charging networks is uneven, apartment residents face practical charging constraints, and electricity distribution companies are often ill-prepared for growing demand. Range anxiety, therefore, is less a technological limitation than a governance challenge requiring better urban planning, power-sector coordination and regulatory standards.

The manufacturing ecosystem also demands closer scrutiny. The PLI schemes have encouraged investments in advanced automotive technologies and battery production, but India still imports much of the critical value chain. Lithium, cobalt, nickel, graphite and rare-earth materials remain overwhelmingly sourced from abroad, while China dominates global battery refining and cell manufacturing. Without securing critical mineral partnerships, expanding domestic processing capacity and investing in battery recycling, India risks replacing dependence on imported crude oil with dependence on imported battery materials. Strategic autonomy in mobility cannot rest on imported inputs.

Equally important is the need to move beyond vehicle assembly towards technological leadership. Domestic production of battery cells, semiconductors, motors, power electronics, battery management systems and charging equipment must become the next frontier. Otherwise, India may emerge as a large EV market without becoming a global EV manufacturing powerhouse.

The current policy discourse also places disproportionate emphasis on private vehicles. Electrifying buses, commercial fleets and freight transport offers far greater environmental and economic dividends by reducing congestion, fuel consumption and urban emissions at scale. Although PM E-DRIVE and PM e-Bus Sewa envisage the deployment of thousands of electric buses, implementation has been slowed by procurement bottlenecks, financing constraints and uneven execution across States. Policy announcements must translate into reliable public transport on the ground.

Nor can electric vehicles alone solve India's mobility crisis. A city filled with electric cars will continue to suffer from traffic congestion, parking shortages and inefficient land use. Sustainable urban transport requires simultaneous investments in buses, metro systems, walking and cycling infrastructure. Electric mobility must complement, not substitute, comprehensive urban planning.

The environmental case for EVs also depends on the electricity that powers them. Tailpipe emissions may disappear, but if charging relies predominantly on coal-based electricity, emissions are merely shifted from roads to power plants. Transport electrification must therefore proceed alongside rapid expansion of renewable energy, grid modernisation and energy storage if India is to realise its climate commitments.

Finally, policy stability is as important as policy ambition. Frequent changes in subsidy structures, localisation requirements and incentive eligibility create uncertainty for investors and manufacturers. Long-term industrial transformation demands predictable regulation, consistent implementation and clear transition pathways.

India has successfully ignited the electric mobility revolution. The next stage, however, requires moving beyond subsidies towards building resilient supply chains, securing critical minerals, strengthening domestic manufacturing, expanding reliable charging infrastructure and prioritising clean public transport. The success of India's EV transition will ultimately be measured not by the number of subsidised vehicles on its roads, but by whether it creates a globally competitive industry that advances energy security, industrial self-reliance and environmental sustainability.