In a strategic pivot towards decarbonized transport, the Government of India has introduced a new policy move to sustain electric vehicle (EV) momentum post the FAME-II scheme. The freshly announced Electric Mobility Promotion Scheme 2024 (EMPS 2024), although initially targeted at two- and three-wheelers with an outlay of ₹500 crore, sets the stage for an imminent subsidy framework for electric four-wheelers.

This development is significant as the FAME-II scheme, which allocated ₹10,000 crore since its inception in 2019, is scheduled to sunset in March 2024. Industry insiders suggest the next policy phase will include calibrated incentives for EV manufacturers and consumers, with a focus on scaling adoption across urban and Tier II/III markets.

“We are nearing an inflection point for EV adoption in India. With the new policy shift, the government is prioritizing affordability, which will be critical for driving scale, especially in the mass-market electric car segment,” said Piyush Goyal, Union Minister for Commerce and Industry, at a recent Confederation of Indian Industry (CII) forum.

Implications for the Consumer Market

For buyers, this policy momentum could mean a meaningful reduction in electric car prices across popular models such as the Tata Nexon EV, MG ZS EV, and Mahindra XUV400. According to market analysts, the proposed incentives could lower purchase prices by ₹50,000 to ₹1 lakh, depending on battery size and localization levels.

“While EMPS currently covers two- and three-wheelers, we are closely watching for developments on four-wheeler incentives. This could be a decisive moment for Indian consumers considering the EV shift,” said Shailesh Chandra, MD, Tata Motors Passenger Vehicles.

States like Maharashtra, Delhi, Karnataka, and Telangana are already extending state-level benefits such as road tax waivers, registration fee exemptions, and cash subsidies. Industry leaders anticipate a more harmonized Centre-State subsidy matrix under EMPS 2.0.

Industry Perspective & Market Readiness

The Society of Manufacturers of Electric Vehicles (SMEV) welcomed the EMPS announcement, though it noted that the quantum of ₹500 crore is modest compared to FAME-II. Industry stakeholders emphasize the need for continued fiscal support, particularly for domestic component manufacturing and battery localization.

“Affordability is a key driver, but charging infrastructure and financing solutions must catch up,” said Kunal Bahl, Senior Analyst, at Crisil Research. “OEMs and charging network operators must collaborate to solve accessibility beyond metro corridors.”

Currently, India has approximately 10,000 public EV chargers, a fraction of the 100,000+ required by 2030, as per NITI Aayog projections. Policy analysts argue that a dual-track approach—affordability plus infrastructure—is critical to hitting India's target of 30% EV penetration by 2030.

Global Dynamics, Local Play

The Indian EV sector is also being shaped by global forces. Tesla is reportedly finalizing plans to establish a manufacturing base in Gujarat or Maharashtra, with a focus on exports and affordable EV models. Meanwhile, Chinese EV giant BYD is scaling operations with models like the Atto 3 and e6, aiming to tap into India's urban consumer segment.

EV sales in India reached a record 1.5 million units in FY24, up from 1 million in FY23. Electric cars alone accounted for 90,000+ registrations, marking a 130% YoY growth. With battery costs declining by ~15% annually and energy prices remaining volatile, the TCO (total cost of ownership) advantage for EVs continues to strengthen.

Outlook

For the Indian middle class, the EV proposition is becoming increasingly rational. Upfront affordability, long-term savings, and improving model availability are pushing EVs into mainstream consideration.

“Electric vehicles are on the cusp of mass-market adoption. With the right policy mix, 2025 could be the breakout year for India’s EV story,” said Richa Mehta, a Delhi-based mobility consultant.

As India seeks to align industrial growth with sustainability goals, this policy recalibration could be a cornerstone in building a resilient, future-ready mobility ecosystem.