How insurance can accelerate EV adoption and power India’s green future

India is at an inflection point in its mobility journey. The country registered close to 1.97 million electric vehicles in FY25, a 24% jump over the previous year, with two- wheelers and three-wheelers driving the surge (IBEF, August 2025). At the same time, the government has reinforced its policy push through the PM E-DRIVE scheme, which has been extended until March 2028 with a funding outlay of Rs 10,900 crores (Ministry of Heavy Industries, Press Release, August 2025). Charging infrastructure is also beginning to reach meaningful scale, with 29,277 public charging stations in operation as of August 2025, compared to just over 25,000 at the start of the year (PIB, August 1, 2025). These developments show clear intent. But ambition alone does not translate into adoption. The missing link is consumer and fleet confidence, and this is precisely where general insurance can step in to accelerate India’s green transition.

The feeling of risk is still the biggest barrier for buyers. Unlike conventional vehicles, where risks are well understood and premiums long established, EVs introduce uncertainties around their most valuable part: the battery. Often accounting for up to 40% of the vehicle’s value (NITI Aayog, e-AMRIT portal), the battery raises questions about degradation, safety, and replacement costs. Unless buyers are reassured that these risks are covered, hesitation will remain. Insurance can provide that assurance by offering battery-specific protection, policies that extend beyond conventional own-damage cover, and products that address degradation, water ingress, or thermal incidents. For fleet operators who typically rotate assets every three to five years, extended warranties and battery health guarantees could provide an added layer of comfort.

The second area of concern is charging infrastructure. With chargers being installed at homes, workplaces, and public locations at a rapid pace, liability is often unclear. Who is responsible if a charging malfunction damages the vehicle or surrounding property? What happens if a cyber-vulnerability disrupts a charging session? Here too, insurance can bring clarity. Policies designed to cover damage to chargers, installer liability, or even accidents at public charging stations will make charging safer and more bankable.

Another barrier is uncertainty around resale and residual value. Second-hand buyers often worry about the state of the battery or the overall health of the vehicle. By linking insurance with certified battery health reports and transferable warranties, insurers can support the development of a dependable used-EV market, in turn encouraging new purchases by reducing concerns about exit value.

This is not just about solving consumer anxieties. For the insurance industry, EVs are central to future growth. In FY24, India’s non-life insurers wrote Rs 2.89 lakh crore in gross direct premium, with motor business contributing 31.7% of the total (General Insurance Council, Annual Report 2023–24). The transition to cleaner mobility therefore is not a niche but a structural opportunity. Well-crafted EV products also improve affordability. Third-party premiums for EVs already come with a 15% discount compared to internal combustion vehicles (IRDAI Notification, May 2022), a regulatory incentive that tilts the economics in favour of green mobility. Combined with innovative own-damage products, such as usage-based or telematics-linked pricing, insurance can lower the total cost of ownership and push adoption at scale.

The way forward requires insurers to move from add-ons to EV-native solutions. Policies must evolve to cover not just the vehicle but the entire ecosystem, including depots, charging operators, and battery leasing models. Equally important is a policy environment that sustains the current premium differential for EVs and encourages transparent data sharing of battery health and telematics between OEMs, insurers, and owners. With these changes, insurance can de-risk the entire value chain and allow financiers, manufacturers, and consumers to take part with confidence.

India has already signalled its ambition through policy commitments and infrastructure expansion. The insurance industry now has the chance to convert that ambition into adoption by addressing the risks that matter most to buyers. If we succeed in building products that reflect how EVs are bought, charged, financed, and resold, insurance will not just be a safety net for green mobility, it will become one of its most powerful accelerators.

(Views are personal; the author is CEO at Reliance General Insurance)