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What can India learn from China and USA about successful EV regulation frameworks
04 Dec 2024
The shift to electric mobility solutions is no longer a distant vision but a pressing necessity. As the global climate crisis intensifies, the demand for sustainable transportation has become more urgent than ever. Governments worldwide play a pivotal role in advancing this transition, and India's government is no exception. In this edition, we examine the regulatory frameworks of countries like the USA and China, which are successfully fostering the growth of their EV ecosystems. By analyzing these international models, we aim to uncover actionable insights that India could integrate into its regulatory framework, helping to enhance its policies and accelerate the adoption of sustainable transportation solutions.

Global Analogues India's journey toward electric mobility is well underway, supported by a range of supply and demand-side initiatives from the central government and individual states. From financial incentives to support infrastructure development, these measures aim to increase EV adoption across the country. However, as India seeks to accelerate its transition to EVs, looking at global analogues could provide valuable lessons. Countries like China and the USA offer compelling case studies on how targeted policies can significantly boost EV penetration.

China China leads the world in EV sales, with approximately 5.9M sales recorded in FY22, constituting over 60% of all new EV registrations globally. The development of the EV ecosystem in China is primarily driven by an increasing focus on reducing vehicular emissions, efforts to diminish dependency on oil imports, and advancements in EV manufacturing.

Another significant factor contributing to the surge in EV adoption is a series of strategic initiatives implemented by the government. These initiatives include tax exemptions on EV registrations, the Zero Emission Vehicle (ZEV) mandate to achieve 40% of all sales as EV sales by 2030, and plans to shift 80% of commercial fleets (including public transport, rental, logistics, and delivery vehicles) to EVs.

Moreover, China currently supplies 85% of the world's cobalt, 30% of batteries, and 25% of rare earth metals, positioning the country at the forefront of the global EV ecosystem.

USA

The USA has experienced a notable surge in EV sales, positioning itself as the second-largest market globally after China, with approximately 990K EVs sold in FY22. This shift towards EV adoption is primarily propelled by an increasing emphasis on reducing vehicular emissions, escalating gasoline prices, supportive government policies, and the introduction of new EV models in the market.

Government support for widespread EV adoption in the USA is evident through various initiatives, including tax exemptions, zero registration fees, preferential parking for EVs, implementation of a ZEV mandate to achieve a 100% share of EVs in vehicle sales by 2050, and budget allocations aimed at establishing charging infrastructure across the country.

Outlook for India

Drawing inspiration from global counterparts and analysing strategies employed by governments in leading EV nations, India can integrate certain pivotal regulations within its regulatory framework, as highlighted in Exhibit 3.
To promote EV demand, the government can offer toll incentives, parking incentives, and implement a feebate system at the central level. Concurrently, to encourage EV manufacturing, the government can initiate retrofitting programs, establish a strategic research and development agenda for EVs, and allocate specific fiscal resources to fund policies and incentives.

Moreover, for enhancing the charging infrastructure, stations can be set up undercorporate social responsibility (CSR) initiatives, allowing load balancing and grid-optimized utilization through charging infrastructure and charging point operators. These regulations, spanning across the dimensions of supply, demand, and infrastructure, can help pave the way for an accelerated transition towards a sustainable and thriving EV ecosystem in India. 

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