EV subsidies to end in coming years, auto companies must prepare: Heavy Industries Secy

New Delhi: Government subsidies for electric vehicles will end in the coming years, and companies need to be prepared for the challenge, a top official said on Thursday.

The Indian automobile industry must collaborate to set up charging infrastructure to promote electrification on a larger scale, Kamran Rizvi, Secretary in the Heavy Industries Ministry, said while addressing the annual convention of the Society of Indian Automobile Manufacturers (SIAM) here.

He also asked automobile and component makers to spend more on R&D, stressing the need to carry out research and development at a much larger scale.


While India has become a champion in electric mobility with the support of the government led by Prime Minister Narendra Modi, he said, "I can lay out some key challenges, which will happen in the next four or five years. The first thing that will happen is that subsidies and government support will come to an end, and in fact, they have come to an end in some sectors".

The electric three-wheeler segment in India currently accounts for 50 per cent of total sales in the segment, which is significantly higher than the target of 10 per cent by 2026, Rizvi pointed out.

Two to three years later it could be 75 per cent, he said, adding that two-wheelers are not far behind as 7 per cent of all two-wheelers sold are electric.

While cars have also done well at around 4-5 per cent of electric penetration, Rizvi said there is a great opportunity for electric buses, with demand outstripping supply by a huge margin.

Drawing auto makers' attention to charging infrastructure, he said, "SIAM members need to get the act together on electric charging that we have left this charging business to charging companies".

Stating that OEMs need to do more to get charging infrastructure ready across the country, he said, "We have identified 60 high-priority corridors which need to be electrified with certainty".

The ministry has approved Rs 2,000 crore that can be made available to OEMs, he said.

"We should do it in the next two to three years so that all the important highways have been saturated."

Asking the auto industry to increase investment in R&D, Rizvi said, "Your balance sheets are very strong. You can afford to spend on research..."

R&D would enable the industry to catch up with technology much faster as it would shorten the time for innovation, he said, adding that India needs to become inventors of technology.

In his address, V Umashankar, Secretary in the Road Transport & Highways Ministry, said the industry and the government need to work together to face challenges, such as "options of the fuel mix or the power train mix" in future.

"Ten years back, the direction was known. It was common. It was just improvements, innovations, and efficiency... Now, we are placed at a position where the fuel is also becoming an issue, and that issue will also need to be tackled with the same spirit of cooperation," he said.