February 12th, 2025
In a decisive move that signals a shift in India’s electric vehicle policy landscape, NITI Aayog CEO BVR Subrahmanyam has made it clear that EV manufacturers should not anticipate additional subsidies beyond the current PM E-DRIVE scheme.
Market Dynamics and Policy Challenges
Electric vehicle manufacturers face a complex web of challenges as they navigate state-level permit restrictions while trying to expand their market presence. Despite the Centre’s ₹10,900 crore allocation under PM E-DRIVE, running through March 2026, industry leaders argue that local permit limitations are creating significant market barriers.
Urban Implementation Hurdles
The impact of current policies varies dramatically across cities:
- Agra, Jammu, and Meerut have achieved 60-70% electric three-wheeler penetration
- Other cities remain stagnant at 10-20% due to administrative restrictions
- Delhi’s cap of one lakh electric three-wheelers exemplifies the regulatory constraints
Infrastructure and Community Resistance
A significant roadblock has emerged at the community level, where Resident Welfare Associations (RWAs) are creating barriers to EV adoption:
- Many RWAs resist the installation of charging stations
- State-level intervention may be necessary to address these concerns
- Industry leaders advocate for central guidelines to streamline implementation
Solutions and Path Forward
Major industry players, including Bajaj Auto, Mahindra & Mahindra, Ola, Ather, and Omega Seiki, have proposed several solutions:
- Rapid deployment of public charging infrastructure
- Removal of city-wise vehicle caps
- Development of standardized guidelines for charging station installation
Regulatory Evolution
The Commission for Air Quality Management in the National Capital Region has recognized these challenges and plans to approach the Supreme Court regarding permit restrictions on EVs, potentially setting a precedent for other regions.
Industry Implications
The message from NITI Aayog is clear: the future of India’s EV sector must be built on market viability rather than government subsidies. This stance pushes manufacturers to:
- Innovate for cost-effectiveness
- Develop sustainable business models
- Focus on consumer value proposition
As the 2026 subsidy deadline approaches, the industry must prepare for a transition to a market-driven growth phase while addressing infrastructure and regulatory challenges.
