A study reveals gaps and opportunities to make policies more comprehensive and impact driven

The early success of e-mobility in India can largely be attributed to a supportive policy landscape at the national and state level. Of the 36 states and Union Territories in the country, 26 have released EV policies over the last 5 years, with 16 of them being released between 2020 and 2022. With e-mobility expansion placed as one of the key pillars in achieving faster decarbonisation across the country, the success of state EV policies is both significant and necessary for India’s carbon reduction goals.

A study by Climate Trends, ‘Analysis Of State Electric Vehicle Policies And Their Impact’ has assessed the comprehensiveness of these state EV policies based on 21 parameters that cover targets and budget allocations, demand side and manufacturing incentives, and focus on fleet electrification, charging infrastructure mandates and job creation. The report also analyses the progress of 8 policies that have been active for two years or more. It shows that none of them are on track to meet their targets of EV penetration, charging infrastructure or investments. 

“It is a good sign that the majority of Indian states have EV policies, however a successful transition to zero emission transport depends on the effectiveness of their design and implementation. It also depends on having a national transport electrification target, which currently doesn’t exist in India. Our study shows that few state policies have comprehensive designs which balance EV sales, manufacturing and overall ecosystem growth. There are gaps in implementation, leading to slower on-ground impact, which need to be addressed through better regulation, improved monitoring, mechanisms and capacity building of stakeholders across the policy value chain.” said Aarti Khosla, Director, Climate Trends.

Siddharth Goel. Sr. Policy Analyst, International Institute for Sustainable Development adds, "State EV policies can play an important role in advancing the electric vehicle ecosystem in India, both in terms of accelerating deployment and attracting manufacturing investment. This has already been witnessed in a few states, such as Delhi and Maharashtra, following the launch of their supportive EV policies. This timely report provides a comprehensive breakdown of the key elements in state EV policies, which can facilitate cross-learning between states, and support policymakers in identifying missing elements in their policies. It will also enhance public accountability by highlighting the progress that states have made towards their stated EV targets.”

Watch the key findings of the report


Most comprehensive policies:
Maharashtra, Haryana, Uttar Pradesh, Delhi and Punjab offer the widest range of parameters, between 13 to 15 of the 21 parameters, making them the most holistic policies.

Least comprehensive policies:
Arunachal Pradesh, Manipur, Himachal Pradesh, Ladakh, Kerala, and Uttarakhand offer between 3 to 7 of the 21 defined parameters in their policies, making them the least comprehensive.

Strongest demand side incentives:
Nine states and UTs - Delhi, Odisha, Bihar, Chandigarh, Andaman & Nicobar, Maharashtra, Haryana, Rajasthan and Meghalaya - offer 5 to 6 out of 8 forms of demand side incentives.

Weakest demand side incentives:
Nine states - Andhra Pradesh, Arunachal Pradesh, Manipur, Karnataka, Himachal Pradesh, Gujarat, Madhya Pradesh, Tamil Nadu, Kerala - offer only one or two demand side incentives.

Strongest manufacturing incentives:
Tamil Nadu, Haryana and Andhra Pradesh have the strongest supply side incentives, with special support to boost EV manufacturing, apart from incentives offered in the state’s industrial policy.

Only 9 states have mandated the creation of charging infrastructure in new residential buildings, offices, parking lots, malls, etc: Chandigarh, West Bengal, Andhra Pradesh, Tamil Nadu, Odisha, Delhi, Maharashtra, Meghalaya, Ladakh

Only 8 states have specific targets for electrification of fleets such as last mile delivery vehicles, aggregator cabs, government vehicles: Maharashtra, Delhi, Haryana, Karnataka, Assam, Madhya Pradesh, Manipur, Andaman & Nicobar

Impact of state policies: Eight states released their policies before October 2020 and none are on track to meet their targets - Andhra Pradesh, Bihar, Karnataka, Kerala, Madhya Pradesh, Tamil Nadu, Telangana and Delhi

EV penetration is below target:
Madhya Pradesh aims for 25% of all new registered vehicles to be electric by 2026, but its current penetration stands at 2.2% of total vehicle sales since policy launch. Delhi’s EV penetration stands at 7.2% against its target of 25% by 2024. Tamil Nadu has no defined target but EV penetration is a mere 2.02% of registered vehicles.

Electrification of public transport lagging:
Across all 8 states, penetration of electric buses is far below policy targets. Tamil Nadu aims for 5% of buses to be electric, but has no e-buses on ground yet. Kerala aims for 6,000 buses by 2025 but has only 56 on ground.

Charging infrastructure growth is slow:
Delhi, with the highest charging stations and points, has only made it to 9.6% of its 2024 target of having 30,000 charging stations. In all other 7 states, publicly available data shows public and semi public charging stations to be between 100 to 500 only.

No progress on green zones:
Seven states aimed to create green zones either under their Smart Cities Initiative, but none have progressed on this so far.

How can state policies maximise their impact?

Reflecting on the road ahead, Siddharth Goel adds, “In the future, states should take into consideration their unique competitive advantages when designing EV policies. IISD's research, based on consultations with investors, has found that states need to accelerate support for charging infrastructure and provide renewable energy supply to charging stations to attract international investment into their EV ecosystem."

The report recommends states to reassess their policy designs to make them more comprehensive and well balanced for both, the growth of EV sales and overall EV ecosystem, as well as have a longer term vision till 2030. It also recommends greater focus on fleet electrification through mandates for cab aggregators, last mile delivery service and e-commerce companies. Electrification of public transport will be key for zero emissions transport, and all policies must build in mechanisms to achieve their bus electrification targets. And finally, the lack of on-ground progress in policies active for 2 years or more, highlights the need for monitoring policy implementation, to achieve greater impact, and recognise opportunities to course correct and revise policies.

“The critical need now is effective design and implementation of these policies that take into account the specific and unique characteristics of each state. We also need replicable models that can be modified by states to suit their requirements and scale adoption. To accelerate adoption at the sub-national level, we urgently need several institutional frameworks and governance structures in place. For instance, a city-level EV cell, on the lines of Mumbai EV Cell, will be beneficial to track and catalyze the overall growth of the sector at a granular level. We must also explore cross-sectoral collaborations and partnerships that leverage the strengths of each sector to spur growth. As financing continues to be a major bottleneck in large-scale EV adoption, exploring ways to leverage private sector financing for EV adoption is another critical requirement at this juncture. We also need to closely analyze the state of readiness of the supply side to ensure that the emerging models are in line with customer requirements and expectations. Lastly, to encourage adoption at the sub-national level, regulatory mechanisms in the form of mandates (for instance, ZEV mandates) will be critical. A strong impetus to state-level action is imperative to elevate India’s e-mobility trajectory and ensure that we are on track to achieving the national target of 30% EV market share by 2030” says Pawan Mulukutla, Director, Integrated Transport, Electric Mobility and Hydrogen, WRI India.

Full report can be accessed here