AMO Mobility Solutions Pvt. Ltd. expects to fulfill the expectations of the Indian market and consumers on various parameters. As the electric vehicle awareness increases, the company expects the market to join the revolution and choose AMO. In the EV market’s initial phase, every EV player is looking to evolve and grab the opportunity, and the company believes there is a huge scope to target and grow.
In a recent interview, Abdullah interacted with Mr. Sushant Kumar, Managing Director, AMO Mobility in which he discussed about the objectives of the significant EV policies, formulation and application of EV policies, grants and incentives that governments are offering to encourage the use of and production of EVs, steps taken to address issues like consumer awareness, battery recycling, and the development of charging infrastructure, influence of legislative frameworks on EV Market, future development and trends in EV Market.
What are the main aims and objectives of the significant EV policies that countries throughout the world have put into place?
Several global EV policies and reforms are in action across the world, while their scope may vary, they all have one thing in common – the ultimate objective. On a broader level, all major EV policies have been implemented to help tackle the issues related to climate change. Electric vehicles are known to have a smaller carbon footprint compared to their petrol and diesel counterparts, even after accounting for their electricity usage.
In fact, the International Energy Agency reported that to reach the global sustainable development goals the world needs 230 million EV fleets on the roads by the year 2030. This makes EVs a part of a critical measure to reduce greenhouse emissions and help advance towards the net zero emissions goal. Now, to achieve this, countries, including India, have been following a comprehensive approach. To begin with, the governments have been offering substantial subsidies, tax incentives, and rebates to EV buyers. For instance, in India, both the Central and the State governments offer tax breaks and subsidy reliefs to help consumers overcome the challenges of upfront costs.
Additionally, government bodies are working relentlessly to implement stricter emissions standards for petrol and diesel-driven vehicles to push automakers to electrify their productions. In fact, many governments including our country are exploring plans to ban vehicles running on petrol and diesel. Through stricter norms, the government in India is trying to phase out conventional vehicles and promote a mass-scale switch towards electric vehicles across all segments. To further support this drive, we have seen how the Indian government is increasing CAPEX towards EV infrastructure and paving avenues for foreign investors.
What aspects of main EV policies vary throughout nations or regions, and what influences the formulation and application of these policies?
The latest EV policies can be seen as a complex mix and responses to the longstanding economic, environmental, and industrial considerations. Now, the intensity of these mixes may vary among nations and regions, as the focus or concern may differ from one place to another. For instance, in India, while benefits under previous policies like FAME-II and new initiatives like the Electric Mobility Promotion Scheme 2024 were designed to help resolve issues and cost-related concerns in the entire country, the state policies are more hyperfocused.
We have noticed that each state follows a different set of criteria when extending EV-centric benefits. Additionally, subsidies allotted to electric two-wheelers in different states depend closely on the size of the lithium-ion batteries and other parameters. For instance, Gujarat has not waived any road tax on EVs, but the state has waived their registration charges. On the other hand, Maharashtra was widely applauded for offering incentives on all EV categories, with up to Rs. 10,000 set aside for two-wheelers. The state also offered subsidies for scrapping petrol or diesel-run old vehicles.
Could you elaborate on the particular grants and incentives that governments are offering to encourage the use of and production of EVs?
The Indian government has introduced several incentives over the years to support the EV industry and encourage its adoption. Among such policies, the Faster Adoption and Manufacturing of Electric Vehicles Scheme was the most popular and successful till it was discontinued on 31 March 2024. For electric two-wheelers, the scheme offered a subsidy of up to Rs. 10,000 per kWh capped at 15% of the vehicle’s ex-factory price.
Following FAME-II, the government rolled out the Electric Mobility Promotion Scheme 2024, which aims to boost India’s manufacturing prowess, while supporting 3,72,215 EVs by July 31, 2024, including two-wheelers. The scheme is offering incentives of up to Rs. 10000 on every two-wheeler used for commercial, private, or corporate purposes.
To further strengthen domestic EV manufacturing, our government has recently launched a new scheme. Interestingly, it is focused on attracting foreign investments and international market players in India to boost local production. I believe these central policies backed by state initiatives can help boost EV manufacturing and adoption rates in India significantly.
What steps do significant EV policies take to address issues like consumer awareness, battery recycling, and the development of charging infrastructure?
In my experience, EV policies can help tackle deep-rooted issues related to consumer awareness, battery recycling, and the deployment of charging infrastructure in the nation. In fact, over the years, government policies have helped create significant buzz around these issues and are working steadily to address them. To begin with, the government already has a live online EV awareness portal to educate the masses about EV targets, incentives, available support, and insights related to investment opportunities.
Furthermore, I believe that the consecutive policies and EV-centric reforms have helped bring electric vehicles under the limelight while provisions in recent budget allocations have helped display the government’s faith in the sector, increasing awareness about its growth potential. In fact, this renewed interest has drawn the attention of domestic and international investors who are keen to explore investment opportunities, especially in the charging infrastructure segment. Besides this, the government has been making strides in expanding the charging network across India, with the current number of public charging stations standing at 12,146.
The government has also been instrumental in pushing narratives around battery waste management and recycling in the country. In 2022, we saw the introduction of Battery Waste Management Rules which managed to cover critical aspects of battery management and recycling. Some of the elements of this rule apply to all major stakeholders of the industry, including manufacturers, producers, importers, assemblers, dismantlers, recyclers, and even auctioneers. In fact, electric two-wheeler manufacturers like us are mandated to meet the collection target of 70% of batteries placed in the broader market in 2022-23, with a seven-year compliance time starting 2026-27.
What influence do legislative frameworks—such as tax credits, car registration incentives, and pollution standards—have on the EV market?
I have always believed that a conducive policy framework is a must to support the growth of an industry. When it comes to EVs, we must admit that so far the government has made significant reforms through tax credits, registration incentives, and pollution norms to accelerate the electrification process of mobility in India.
For instance, Section 80EEB of the Indian Income Tax Act, allows EV buyers to claim a maximum deduction of Rs. 1.5 lakh on their EV loan interest payment. This has encouraged more individuals to switch to EVs and increased the demand for EV loans, in turn, supporting the growth of EV financing companies. Similarly, the government has reduced GST on EVs from 12% to 5% and on chargers from 18% to 5%. This move has made EVs more affordable and incentivized investors to park money into EV charging infrastructure.
The government also offers other incentives such as exemption on road tax and registration. Furthermore, some states like Maharashtra also offer scraping incentives when old petrol and diesel vehicles are de-registered. Interestingly, EVs do not produce emissions, which eliminates the requirement of getting a PUC certificate, further simplifying the experience of owning an electric two-wheeler. These legislative efforts have impacted the broader EV market significantly, benefitting EV manufacturers, consumers, financing companies, investors, and charging stations.
What larger environmental and climate change mitigation objectives, such as lowering greenhouse gas emissions and air pollution, are in line with significant EV policies?
Most of India’s current EV policies are in line with the critical objectives highlighted at COP21. To begin with, India’s drive to reduce the nation’s carbon footprint by 33-35% by 2030 against the 2005 levels with the support of EVs aligns with its greater ambition to lower greenhouse gas emissions and achieve net zero emissions by 2070. Similarly, the efforts to phase out petrol and diesel-run cars from Indian cities and replace them with EVs aim to achieve the larger objective of combating air pollution. Several studies have shown that transition to EVs could help reduce NOx and PM2.5 concentrations in major cities.
These efforts to push EVs also focus on achieving the greater goal of reducing fossil fuel imports. It is understandable as an increased adoption of electric vehicles can help lower the transport sector’s oil consumption and allow the country to save more on imports. I had come across data that stated that our nation’s transportation sector accounts for around one-third of its total crude oil consumption, where a whopping 80% is singlehandedly consumed by road transportation. Hence, I believe this switch to electricity-driven vehicles could help lower reliance on fossil fuels and encourage the adoption of cleaner energy sources. A quick look at recent policies to support Made in India EVs and components and a renewed focus on the use of solar energy further highlights India’s move towards achieving these greater goals.
Could you talk about how the automotive sector is affected by significant EV regulations in terms of investment patterns, market dynamics, and technological innovation?
As per my observation, the automotive sector is undergoing a transformation due to the recent shifts in EV regulations. India’s efforts to draw foreign investments into the EV sector and lure international brands to set up factories in the country are notable advances that could very well shift market dynamics and prompt innovation. For instance, the latest policy to reduce EV imports to draw foreign brands, given they invest $500 million in India through production is expected to boost four-wheeler production in India and encourage new auto firms to enter our domestic market. More reforms in this line could attract EV players from different segments into India. Needless to say, such policies will only increase market competition, especially in the passenger vehicle segment.
While domestic EV manufacturers may benefit from the government’s push to promote localization and make investments accessible for local companies, I believe the entry of foreign players and more domestic companies will push new and existing manufacturers to amp up their efforts. As a result, down the road, we can expect to see more variations in the design, technology, and pricing range of EV models across segments.
With more policies like Production Linked Incentive (PLI) schemes and EMPS 2024 in place, I expect the domestic EV landscape to change and emerge as a direct competition to international markets. Also, the recent focus on cleaner technologies could spur innovation in battery technology, charging infrastructure, and electric motors, prompting a more holistic growth in the sector.
What are the obstacles and constraints involved in putting significant EV policy into practice, and how are governments handling them?
Over the years, I have noticed that the high upfront cost of electric vehicles continues to dissuade individuals from exploring the long-term benefits of EVs or embracing them as a mode of transport. Additionally, issues related to battery life, limited range, and significantly long charging times continue to hamper consumer experience, discouraging them from purchasing it.
While there are brands that offer quality EVs with reliable ranges backed by efficient technology, they are often expensive for the masses who seek affordability and performance. However, recently we have noticed more focused efforts from the government, private entities, and even EV manufacturers to resolve these prominent roadblocks to EV adoption. For example, as I mentioned earlier, the government has launched several incentives to help consumers offset the upfront cost of EVs. Additionally, the government in collaboration with private entities is investing resources in building more charging hubs to address consumers’ range anxiety.
This is also helping the charging infrastructure attract more investments from private investors and ventures. To support the government in addressing these challenges, EV manufacturers like us have taken it upon ourselves to invest more in R&D to innovate our product line so that we can offer our customers better products at more competitive prices. I believe a more collaborative approach initiated by the government to include stakeholders could help simplify these challenges.
What steps do significant EV policies take to address issues of accessibility and social equality, especially in underprivileged areas or communities?
Today, transportation is among the top three polluting sectors in our country, accounting for nearly 10% of India’s greenhouse gases. This is why decarbonizing the sector is the need of the hours to not just achieve the nation’s net zero emissions goal by 2070 but also to safeguard the community. I believe we need more initiatives across the public and private sectors to ensure more fair and equitable access to EVs and meet these crucial climate goals.
Unfortunately, the low to moderate-income groups are the most affected by pollution and poor air quality. Due to their economic restraints, they also do not enjoy easy access to electric vehicles, creating a gap. While policies to make EVs accessible to consumers exist, more efforts should be given to draft reforms that benefit lower-income groups the most. In fact, targeted subsidies for EVs and setting up EV charging infrastructure in underprivileged areas can help make them more affordable and accessible. Similarly, electrifying public transportation like rickshaws and buses on a large scale can help the community and offer them access to sustainable transportation.
Above all, there should be more concentrated efforts to educate the public about the benefits of EVs and the policies that support their growth so that more individuals can benefit from them. In this regard, I believe a collaborative stance of the stakeholders can help develop and implement plans and programs that boost EV adoption and promote inclusivity.
What are the anticipated future developments and trends for the main EV regulations, and how will they affect the world’s shift to environmentally friendly transportation?
Regulation policies help forming ecosystem for growth of new markets like Electric Vehicle as such the policies should be long term and stable while regulations are required to maintain the sustainability of the ecosystem. It should be more based on the actual life cycle of the ecosystem with good long term policy regulation from work demand and supply side of the ecosystem can get impetus for further growth and shift the mobility in the country towards e-mobility.