The Indian Government has got its EV Policy all wrong by not Incentivizing Private Electric Cars

The Indian government has still got a strong socialistic mindset despite the 30 years of economic liberalization as it still considers necessities such as cars as luxury goods. Though a large majority of Indians still don’t own cars due to the low per capita income and the underdeveloped economy, considering a car to be a luxury is plain stupid. This mindset has led the government to form a policy for Electric Vehicles in which it is only promoting two, three wheelers as well as buses which it considers as vehicles for the common man while private cars are considered as luxuries which requires no incentives and subsidies from the government. This leaves a massive gap in the Indian EV market as private cars form the biggest segment by value. Even though India has the biggest two-wheeler and three-wheeler market in the world, the value is not that high and the growth has also tapered as customers want to move up the ladder to a car from a two-wheeler. Three-wheelers are mostly used for public transport like buses.

Considering cars a luxury is very misguided as most cars in India are sold in the USD 10,000 range to extremely price-sensitive customers. They can’t be considered a luxury by any yardstick and expecting automakers to sell EVs to this segment is very difficult as batteries cost a lot and it is not possible to go head to head against ICE cars at this price range. This means that India will get far behind other countries in EVs as huge progress is being made in EV cars which will replace fossil fuel based transportation in the future. India with its large auto industry cannot afford to miss the bus both literally and figuratively. By incentivizing EV cars, India can become a low-priced manufacturer of EV cars as other countries are focusing on high end Electric cars (Tesla etc.). This can not only be used in India but the country can also become a major exporter of low-end cheaper electric cars to the African market just like it has done for two-wheelers and three-wheelers. The Indian government needs to get its strategy right otherwise it will create a huge hole where the Indian auto industry exists.

Also, read India’s EV Industry Fails to Kickstart and Stalls In 2020