The policy environment for encouraging the production and sale of electric vehicles (EVs) in India seems to be in a state of uncertainty. Despite the industry's hopes for an extension of the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) subsidy scheme, the recent Union Budget, presented last month, did not include any new announcements regarding additional incentives for EV sales.

Furthermore, a scheme intended to boost domestic manufacturing of electric passenger cars has also been stalled since its hurried announcement in March, as its guidelines are still pending publication. Only one stakeholder meeting has occurred so far. The industry is already expressing dissatisfaction with this scheme, which supports domestic manufacturing and appears to align with the demands of certain global EV OEMs, including Tesla. Domestic OEMs have voiced objections to the concessions proposed for Tesla and other global manufacturers, leaving the matter unresolved.

Adding to the challenges facing the electric vehicle sector, the Ministry of Heavy Industries has firmly stated that there are no plans to increase subsidies for various categories of EVs. In response to a query about potential increases in subsidies to enhance EV adoption, Minister of State B S Varma indicated in a written reply to the Rajya Sabha that the Ministry is not considering any proposals to raise subsidies per unit for different types of e-vehicles. He attributed this decision to the absence of a slowdown in EV sales, noting that the current subsidies and incentives are deemed sufficient. According to government data, EV registrations have surged nearly tenfold over the past five years, growing from approximately 1.74 lakh in 2019-20 to 16.8 lakh in 2023-24.