India Will Sell Only Electric Two-Wheelers Vehicles After 2025

The Indian government is attempting to boost electric vehicles adoption in the country and to support that goal, it will probably turn them into a mandate in specific categories, namely the two-wheelers with up to 150cc engine capacity and three-wheelers.

The expectations surface through a high-level government panel’s recent recommendation. According to TOI’s report, the recommendation probably results in the mandate to only sell electric three-wheel vehicles from April 2023, and electric two-wheel vehicles with an engine capacity of up to 150cc from April 2025. This action aims to reach the highest sales in these two segments in the automotive market in India with an annual revenue of more than 20 million units.

As reported, the panel has estimated the automotive industry’s current expenditure on BS-VI compliant vehicle production in these categories from next April. The transition window from four to six years is to let automotive manufacturers earn profit from these compliant vehicles. Also, the discussion suggested a similar mandate for delivery vehicles, city, and school buses.

The government panel included an inter-ministerial steering committee that is led by Amitabh Kant, Niti Aayog CEO. Besides the above-mentioned mandates, it also asked for doubling direct subsidy for three-wheel vehicles powered by electricity to Rs 20,000/kWh. If the proposal is passed, the new grant is expected to make the price range of these vehicles as affordable as the ones powered by fossil fuel.

In addition, in an attempt to boost the adoption of EVs, the panel will probably set up very strict norms in fuel efficiency for vehicle run by diesel and petrol, leading to the rise in these vehicles’ pricing, which prevents people from buying them.

To make this work, the Indian power ministry has been on the track of completing the framework for carbon credit trading mechanism to make the CAFE (corporate average fuel efficiency) norms more effective. Taking a similar step, the transport ministry of India is working on a plan for an EVs’ staggered transition in each category in 2030.

The automotive industry has received many different opinions about it. Some require more incentives to alter their current production infrastructure to match with EVs while some have already introduced their own EV offerings to the market with the introduction of EVs of big automotive manufacturers for the several following years.

However, another big issue is the lack of corresponding infrastructure in India. To handle it, recently, the government has targeted to set up the standards for charging stations for electric vehicles. Then, the expense for these stations will dramatically decline, which leads to the increase of these stations nationwide.