Niti Aayog pitches for national EV policy with clear targets and timelines

The government think-tank Niti Aayog has pitched for a national EV policy with clear targets and timelines to fast-track India's electric mobility transition.

The Aayog, in its report titled 'Unlocking a USD 200 Billion Opportunity: Electric Vehicles in India', further recommended expanding corporate average fuel efficiency norms to a wider segment of vehicles.

The report called for establishing a national EV policy with clear targets and timelines, and a regulatory framework with phased EV mandates.

"Establish a national EV policy with clear targets and timelines... Announce a clear policy, with target timelines, for Zero Emission Vehicle (ZEV) adoption," Niti Aayog said.

The report was released by Niti Aayog member Rajiv Gauba.

"Design a progressively more stringent plan for mandating the production and purchase of EVs and disincentivising the continued use/production of internal combustion engine (ICE) vehicles," Niti Aayog added.

It also suggested moving from incentives to mandates/disincentives, as incentives have done what they could, and a further push requires stronger signals through regulation.

The report said that the government should focus on a subset of the vehicle fleet, based on the potential benefits from transitioning ICE vehicles to electric and the ease of providing the required ecosystem for them.

"Create a pooled fund with contributions from the public budget and multilateral development banks for providing lower-interest loans for the procurement of e-buses and e-trucks," the report said, and suggested designing and launching an appropriate scheme to channel funds.

Niti Aayog also called for prioritising service delivery models over asset procurement, shifting capital costs to operating expenditures and scaling R&D efforts to drive down battery costs, enhance energy density and reduce reliance on imported rare earth materials.

"Strategic scaling of charging infrastructure and enhancing public awareness and information systems are critical enablers," it said.

It also emphasised the need to nurture the establishment of a battery leasing industry to reduce the capital cost of an EV.

"Design a new programme to saturate 5 cities with 100 per cent e-Buses, e-Para-transit and e-freight vehicles in urban areas," it said.

The report pointed out that VAHAN data does not accurately capture data on different categories of electric vehicles, making policy design, subsidy targeting, and progress monitoring difficult.

Launching the report, Gauba said, "India stands at the cusp of a transformative shift in 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 added.

Niti Aayog CEO BVR Subrahmanyam said the Aayog has already been at the forefront of enabling the ongoing EV revolution. The report offers a timely and comprehensive review of current challenges, alongside actionable recommendations to fast-track the EV transition in India, he added.

India seeks to attain a 30 per cent share of electric vehicles in total vehicles sold by 2030. Sales of EVs in India increased from 50,000 in 2016 to 2.08 million in 2024, against global EV sales of 9,18,000 units in 2016 to 18.78 million in 2024.

The report said India's transition has been slow to start, but it is picking up.

Noting that India's EV penetration was only about one-fifth of the global penetration in 2020, but has picked up to over two-fifths in 2024, the report said it continues to show an increasing trend, though relatively slow. According to the report, India has progressed to only about 7.6 per cent of sales in 2024, which is far behind its target of 30 per cent by 2030.

"Thus, it has taken nearly 10 years to reach a penetration level of 7.6 per cent and now needs to increase this share by over 22 per cent in the next 5 years alone," it added.

The report provides data-driven insights, identifies key unlocks and recommends actionable steps to support a faster and more coordinated national transition to clean mobility.