Government thinktank NITI Aayog has reportedly proposed that only electric vehicles (EV) should be sold after 2030, according to the Economic Times. The government think tank has moved a Cabinet note seeking to assign responsibility for different ministers, and for the Ministry of Road Transport and Highways (MoRTH) to prepare a framework to phase out the sale of diesel and petrol vehicles by 2030. NITI Aayog has also proposed that:

  • MoRTH should be tasked with issuing norms for cab aggregators to replace all fuel run vehicles with electric vehicles by 2030
  • Ministry of Heavy Industries should work on replacement of fuel powered vehicles of union ministries, agencies and the public sector with EVs by 2030
  • Suggested that MoRTH pilot an e-highways program with an overhead electricity network to enable plying of electric trucks and buses on select national highways
  • The Cabinet note comes just ahead of the NITI Aayog’s scheduled meeting companies on June 21 following their discontent with the proposed plan to accelerate the timeline for two and three wheeler vehicles to run on batteries

This development comes in after the Kant-led panel had earlier recommended a complete switch to the use of electric two and three wheelers from 2025. In response, two automobile majors TVS Motor and Bajaj Auto had said that such kind of switch is “unrealistic” and “impractical”. According to TVS Motor chairman, Venu Srinivasan, both India and the global automobile industry has to go a long way to make such a switch.

NITI Aayog’s steps to develop EV industry

The government has been chasing the goal to achieve 30% e-mobility in India by 2030. However, this goal seems unattainable considering India’s charging infrastructure and the high prices of electric vehicles. In order to achieve the e-mobility goals, NITI Aayog has also proposed doubling the electric three-wheelers subsidy under second phase of Faster Adoption and Manufacture of (Hybrid and) Electric Vehicles (FAME II) to Rs 20K per kWh. This will reduce the costs of the vehicles and in turn boost the EV demand.

The central government is also planning to introduce a comprehensive scrapping policy and ‘polluter-pays’ model to boost the demand for EVs. The “polluter-pay” model which was floated by the think tank as “feebate model” involves imposing fines on conventional vehicles and use the surplus to fund electric vehicles. This model was however delayed before the Lok Sabha elections as the government thought that it could hurt the user sentiments.

The government is majorly focusing on increasing the electric vehicle adaptation in the commercial and public transportation space so as to ensure that more number of vehicles get deployed on the roads. Recently, it was speculated that central government plans to direct the taxi aggregators such as Ola and Uber to change 40% of their fleet to electric vehicles by 2026.