The Electric Vehicle (EV) industry in the country does not need more subsidies once the existing subsidy regime ends as all sectors in the ecosystem are self-sustaining, Commerce & Industry Minister Piyush Goyal has said.

“Electric mobility today is absolutely ready and set to fly, they (industry players) do not need newer incentives or subsidies. Existing subsidies are available for some more time and will help them give that appropriate kick-start to the EV ecosystem. But on almost all sectors now there are options and ideas available by which electric mobility can be successfully marketed,” Goyal told the media following a meeting with the EV industry on infrastructure and other issues.

Everyone who attended Friday’s meeting focussing on EVs, including companies manufacturing passenger cars, trucks, two-wheelers and three-wheelers, as well as government officials, were unanimous about not requiring subsidies to grow any further once the existing subsidy regime comes to an end, Goyal said.

Industry Reaction

Representatives from companies such as Tata, TVS, Hero Motocorp and Mercedes-Benz India participated in the meeting together with officials from DPIIT, Niti Aayog, Power Ministry and BIS.

“He (Goyal) asked — ‘who here wants the subsidy to continue’. Since a lot of the people present were only representatives from the companies and not the top brass like CEOs or MDs, no one raised their hands to speak,” said an industry source, indicating that the industry gave an impression of concurring with the Minister.

Shailesh Chandra, President of the Society of Indian Automobile Manufacturers, recently suggested that the government subsidies for EV buyers should be phased out when penetration in a specific vehicle category reaches 20 per cent.

Existing Subsidy Schmes

At present, the EV industry benefits from the ₹10,900 crore ‘PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE)’ Scheme, which came into effect on October 1, 2024, and will remain in force until March 31, 2026. 

The scheme aims to accelerate the adoption of EVs, develop essential charging infrastructure, and establish a robust EV manufacturing ecosystem across the country.

Besides this, the indirect subsidy comes from production-linked incentive (PLI) schemes for the auto sector and manufacturing of Advanced Chemistry Cell (ACC). Electric vehicles are covered under the PLI scheme for automobile and auto components, which was approved in 2021 with a budgetary outlay of ₹25,938 crore for a period of five years.

Under FAME-India Scheme phase-II, incentives are provided to buyers of electric vehicles in the form of an upfront reduction in the purchase price of electric vehicles.

Battery Swapping

On the need to encourage battery swapping, the Minister said that companies will decide their own business model as the government did not want to `micro-manage’.

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