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Auto Inc. Calls for Policy Boost to Accelerate India's Green Vehicle Transition

Clean Energy

Auto Policy Boost Green Vehicle Transition

Business Honor
26 August, 2024

Industry experts highlight that plug-in hybrid electric vehicles (PHEVs) could be pivotal in bridging the gap between ICE and full battery electric vehicles

India's transition to green vehicles remains sluggish compared to China's rapid shift, with electric and hybrid vehicles comprising only 2.5% and 2.4% of the market, respectively. In contrast, China's aggressive policy support and diverse fuel mix have driven electric and hybrid vehicles to 49% of its auto market, significantly reducing dependence on internal combustion engines (ICE).

Despite India's lower taxes on electric vehicles (EVs) and state-level incentives for hybrids, traditional ICE vehicles still dominate with an 84.2% market share. However, robust growth in strong hybrid sales indicates a shift in consumer preference towards technology offering better fuel efficiency without the need for extensive charging infrastructure. Industry experts highlight that plug-in hybrid electric vehicles (PHEVs) could be pivotal in bridging the gap between ICE and full battery electric vehicles. PHEVs offer a balance between electric and conventional engines, making them a practical choice in India's evolving automotive landscape. Leading automakers, including Maruti Suzuki and JSW MG Motor India, advocate for policy interventions to make PHEVs more viable. They suggest that setting a minimum electric-only driving range of 50 km for PHEVs could encourage adoption while addressing range anxiety and reducing fuel consumption.

With strategic policy enhancements, India's green vehicle transition could gain momentum, aligning with global practices and tapping into export opportunities while catering to domestic infrastructure and market realities.