EV subsidies to end, industry must prepare to stand on its own: Heavy Industries Secy Kamran Rizvi

Government support and subsidies for electric mobility will eventually come to an end, and the industry must prepare to sustain the transition on its own, Ministry of Heavy Industries Secretary Kamran Rizvi said on September 3.

Speaking at the 66th SIAM Annual Convention in New Delhi, Rizvi said the withdrawal of government support would be one of the key challenges for electric mobility in the coming years, with subsidies already ending in some segments.

“The first kick that will happen is that subsidies, government support, will come to an end. And in fact they have come to an end in some segments,” Rizvi said.

Despite this, he said India’s EV transition has already gained significant momentum, particularly in three-wheelers. Electric three-wheelers now account for around 50% of all three-wheelers sold, compared with the government’s earlier target of 10% by 2026.

Rizvi said electric three-wheelers could account for 75% of sales in another two-three years.

Electric two-wheelers currently account for around 7% of sales, while electric cars have reached around 4-5%, he said.

The electric bus segment is also witnessing strong demand, Rizvi said, with manufacturers having more orders than they can supply. India needs to electrify around 1.5 lakh public transport buses, as well as around 20 lakh privately owned buses, of which at least half would need to be electrified.

The government expects 160 cities to have electric buses over the next two-three years under the Payment Security Mechanism, he said.

Rizvi also flagged electric trucks as the next major opportunity for the industry. While only around 100 electric trucks were supported under the FAME-II scheme, he said the economics of electric trucks are now improving.

Over the next five years, electric trucks could account for at least 25% of sales in the heavy category, Rizvi said. In the 55-tonne category, he added, electric trucks are already more profitable than diesel trucks.

Rizvi said India’s electric mobility journey has been built through successive government interventions, beginning with FAME-I, followed by FAME-II, the Production Linked Incentive (PLI) scheme, advanced chemistry cell manufacturing and other measures.

The challenge now, he said, is to ensure the sector can continue expanding as government support reduces and electric vehicles become increasingly commercially viable.