India greenlights $1.3b incentive plan to boost electric vehicle adoption

India’s cabinet has approved a scheme to spend 109 billion rupees ($1.3 billion) on incentives for the adoption of electric vehicles in its efforts to curb pollution and move towards cleaner fuels.

The PM Electric Drive Revolution in Innovative Vehicle Enhancement, or PM E-DRIVE, scheme will give subsidies worth 36.79 billion rupees on e-two wheelers, e-three wheelers, e-ambulances and e-trucks, information minister Ashwini Vaishnaw said at a press briefing on Wednesday.

Adoption of EVs is still low in India, but is on the rise as the government promotes clean energy, offering companies incentives to build vehicles and parts in the country.

In a first, 5 billion rupees will be doled out to deploy e-ambulances under the scheme, according to a government statement.

Replacement of trucks - a major source of air pollution in the country - will be incentivised with an outlay of 5 billion rupees for e-trucks. Additional subsidies will be given in return for scrapping old trucks.

It was not immediately clear if the scheme will apply to cars too.

The government said it has also set aside 43.91 billion rupees for public transport agencies to buy 14,028 electric buses.

India’s Road Transport Minister Nitin Gadkari urged carmakers on Tuesday to set up vehicle scrapping centres to get polluting vehicles off the roads, adding that the move could boost sales of vehicles by 18-20%.

Electric models made up less than 2% of the 4.2 million cars sold in India last year, but the government wants to grow this to 30% by 2030.

The new scheme will also focus on improving charging infrastructure within the country and promote testing of new technologies.

The main aim of the scheme “is to expedite the adoption of EVs by providing upfront incentives for their purchase, as well as by facilitating the establishment of essential charging infrastructure for EVs”, the government said.