Govt calls for Siam proposals to rev up electric car adoption in India

EV sales growth in India slowed in 2024. About 99,165 electric cars were sold last year, marking a 20 per cent year-on-year (Y-o-Y) increase, according to the FADA

The Ministry of Heavy Industries has asked the Society of Indian Automobile Manufacturers (Siam) to submit a composite proposal outlining measures that the government can take to accelerate electric four-wheeler adoption in India, Business Standard has learnt. This comes in the wake of a decline in the electric vehicle (EV) penetration over the past few quarters, raising concerns over the segment's growth trajectory. 

Top executives from Siam and major carmakers met with Heavy Industries Secretary Kamran Rizvi to discuss the matter on Friday. Officials from NITI Aayog were also present. Siam and the ministry did not respond to the newspaper's queries till the time of going to press. 

EV sales growth in India slowed in 2024. About 99,165 electric cars were sold last year, marking a 20 per cent year-on-year (Y-o-Y) increase, according to the Federation of Automobile Dealers Associations of India (FADA). EV penetration — measured as the share of electric cars in total car sales — in India remained low at just 2.5 per cent.  

“Different carmakers gave different suggestions during today's meeting. Some advocated for a FAME-like subsidy scheme for electric four-wheelers since the new PM E-drive does not offer any such support. Others proposed more incentives under the corporate average fuel efficiency (CAFE) norms to encourage EV adoption. There was also a suggestion to mandate a fixed percentage of electric cars in government fleet procurements,” said a source privy to the development. 

FAME II scheme provided subsidies for electric cars used in commercial fleets, including cabs. The PM E-drive scheme, with a total outlay of ₹10,900 crore, focuses on accelerating EV adoption but largely bypasses electric four-wheelers. Instead, ₹3,679 crore has been earmarked for demand incentives on electric two-wheelers, three-wheelers, ambulances, trucks, and other emerging EV segments. Another ₹7,171 crore has been allocated for capital asset creation, including subsidies for electric buses, expansion of charging infrastructure, and upgrading vehicle testing agencies. While the PM E-drive scheme strengthens India’s EV ecosystem, carmakers argue that the lack of direct support for electric four-wheelers could slow consumer adoption in this segment, according to the above source. 

CAFE norms set mandatory fuel consumption limits for automakers, requiring them to maintain an average fuel efficiency across all cars sold. The stricter the norms, the more automakers must push fuel-efficient and electric vehicles to comply, or face penalties.