India takes EV goal on lengthy hybrid detour
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
By Ujjaini Dutta
BENGALURU, Nov 20 (Reuters Breakingviews) -Electric cars in India are losing momentum. Prime Minister Narendra Modi’s government wants battery-powered vehicles to account for 30% of the country’s new car sales by 2030 – dubbed the EV30@30 initiative. But its policy map for getting there has added a lengthy hybrid detour.
In the first eight months of the year, sales of pure electric vehicles grew by around 7%, according to automotive business intelligence firm JATO Dynamics India. Petrol and diesel hybrids – which use both a battery and internal combustion engines – pulled ahead by around 20%.
Granted, over the past year hybrids have been proving more popular with new-car buyers from the U.S. to China. But the Modi administration has not done itself any favours, either. It has been subsidising the dual-powered vehicles under its Faster Adoption and Manufacturing of Hybrid and Electric Vehicle (FAME) scheme, the second phase of which ended in March.
Individual states’ policies aren’t helping, either. In July, Uttar Pradesh scrapped the registration tax on strong hybrid cars, which can travel short distances on battery power alone, and Karnataka may take similar steps.
Nor have either national or state governments encouraged fast-enough development of charging networks for pure EVs and plug-in hybrids. A single charging station in India currently services 135 EVs, compared with one for every 20 EVs, at least, in more established markets globally such as China and the United States. That’s keeping range anxiety front of mind, limiting sales.
Combined, these issues have helped propel so-called mild hybrids, which run on gasoline but use a battery to improve fuel efficiency a tad, to 11% of all new cars sales in the country in the first six months of the year, according to JATO Dynamics India. Electric vehicles, meanwhile, accounted for just 2.5%.
New Delhi could address at least some of the policy shortcomings. A third phase of FAME, for example, could limit subsidies to EVs and plug-in hybrids. Without such changes, New Delhi is likely to fall far short of its EV30@30 goal; research firm BMI reckons pure battery-powered vehicles may make up less than 7% of new sales in 2033. That’d be an embarrassing loss of power for Modi’s government.
CONTEXT NEWS
The state of Karnataka in southern India is planning to cut road tax and registration fees for new hybrid cars that sell for less than $30,000, Reuters reported on Sept. 25, citing a draft version of a state government document.
Between January and August this year, sales of pure electric vehicles grew by 7% compared to the same period in 2023, according to automotive business intelligence firm JATO Dynamics. Sales of petrol and diesel hybrids grew 18% and 21%, respectively, over the same time frame.
Graphic: New car sales market share in India by powertrain https://reut.rs/4902Tci
Editing by Antony Currie and Aditya Srivastav
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