Financial Incentives for Promotion of Electric Vehicles in India- An Analysis Using the Environmental Policy Framework

Abstract

India has seen some of the most damaging social and environmental effects of air pollution in recent times. It has also committed at the COP 21 in Paris to help reduce global warming. Following this voluntary agreement, India plans to increase the share of electric vehicles to 30% of total vehicles sold by 2030 to reduce air pollution. This paper studies the major financial incentives and policy measures undertaken since 2015 as part of the EV policy and views it through the lens of the Environmental Policy Framework, which considers five major types of instruments: Regulations and Standards, Green Taxes, Incentives, and Subsidies, Carbon Credits and Voluntary Negotiations. Another instrument called ‘Information Dissemination Measures’ is added to this framework to help evaluate the current EV policy. We find that while there are good financial incentives, to begin with, charging infrastructure and research in battery technology needs to be increased in India. There is also an urgent need to improve communication and awareness about EVs and their role in the reduction of pollution to help overcome the hesitancy in adopting this new technology.

Keywords

• air pollution, financial incentives, electric vehicles environmental policy, ev policy, jel classification