Indians have been slow to adopt electric vehicles (EV) compared to many of their Asian peers. With conflict and chaos lingering in West Asia, range apprehension is fast giving way to pump anxiety worldwide but we are witnessing a happy confluence of choice, cause and cost. It’s a once in a lifetime opportunity for us to reimagine an EV push, while reorienting subsidies from producers to consumers. But first we need to address what lies at the heart of such engineering marvels: The battery.
The 1973 oil shock drove Detroit—which produced half the world’s cars then – out of business. Japanese small cars, which kept fuel economy central to their form factor triumphed over bulky American gas guzzlers. But that shift remained within the same combustible (ICE) technology. The current crisis can actually make people cross over at scale.
Bookings for the new electric variant of Punch went up 5 times in March (M-O-M), within a month after the makeover — even exceeding the traction for the Tiago SUV, electric and ICE versions combined. Overall, electric car registrations rose 49% year-on-year – to reach an all-time high, in March data from the Vahan portal shows.
Also read: India EV Boom 2026: Electric cars race ahead – until price, policy and reality hit the brakes
Between monthly fuel savings, assured buybacks, warranties, and 40% depreciation benefits, the economics of driving had shifted toward EVs for a long time. Yet adoption has been sporadic as multiple frictions – lack of charging infrastructure, battery range, risk aversion – made most consumers apprehensive. Most importantly, the payback period got in the way: People seldom calculate the total cost of ownership (TCO) when finalising purchase decisions. With higher upfront costs, an EV would have pinched the middle-class wallet, even if over an 8-10 year lifespan, it would have turned out to be a much cheaper bet.
Benign crude prices have thus far masked the benefits, but now oil above $100 is the best sales pitch to accelerate their transition as the cost-benefit analysis has become far more pronounced and compelling. Never before, has the price conscious consumer felt the urgency to switch. The temporary excise cuts on road fuel are unlikely to last after the recent round of state elections. This is where choice can play the catalyst. China – the largest new energy vehicle market in the world – has 130 brands selling close to 600 models. It is a fifth and a tenth in India respectively. But car makers have finally started to deal with supply side challenges in India by introducing new electric models, facelifts or variants across price points. In 2026 alone, close to a dozen models will drive into the market, the highest ever. Even the hidebound Japanese players Maruti Suzuki, Toyota and Honda will see an EV offensive. The feels Anurag Mehrotra, MD of JSW-MG Motors should help rachet up EV penetration by at least 3 times by end 2030.
But unless the mass segment – the sub Rs 12 lakh – moves, plans for large scale switchovers will splutter. Currently, below the crucial Rs 10 lakh threshold—the belly of the market — the choice is only between the troika of Tiago, Punch (Tata Motors) and Comet (JSW MG Motors). The sweet spot for most EV models is still the ₹ 12-25 lakh range. EV penetration is therefore strongest in the ₹10-20 lakh segment, data from Jato Dynamics, an intelligence firm show.
So far, our policymakers have primarily incentivised carmakers. From FAME to the production-linked incentives for manufacturing or even the penal provisions under the CAFÉ norms, the industry has primarily been pushed to adapt and invest in the EV ecosystem. Consumers have rarely been at the heart of this conversation. That ought to change. Incentivise the value buyer to drive decarbonisation and convert the first timers. Otherwise, EVs will remain a second-car phenomenon among the affluent.
Several states have periodically introduced a bounty of benefits and tax breaks, but mostly they have volume caps or are time bound. Since April, the Karnataka government ended the 100% road tax exemption for electric four-wheelers, introducing a tiered lifetime tax based on vehicle cost. Delhi is possibly the only one that has delinked sops and sales in its recent draft EV policy guidelines.
Nudging fleet taxis – 8–12% of India’s annual passenger vehicle sales — towards EV is a low hanging fruit that also takes away the worry of oil theft among fleet owners. The incentives for this segment have lapsed after the 1st two rounds of the FAME policy. Policies need to encourage and entice. And they should also be held in place much like the hard restrictions on gasoline powered 2 wheelers.
Legacy automakers with high fixed costs – complex supplier networks, overlapping product lines and significant capex already tied to internal combustion—are in a bind to break into the mass segments where EVs head-on compete with popular petrol cars without margin erosion. Higher the localisation, the lesser the pain. And volumes are a force multiplier.
The framework for PLI Auto – only 9% of the total Rs 25,938 crore corpus has actually been disbursed since FY24 — can no longer exist just as a subsidy mechanism but must foster innovation and inclusivity by broadening the eligibility criterion and streamlining payouts. The iron grip of China is also short-circuiting plans to indigenise battery technology. Reliance Industries has paused plans to make lithium-ion cells after failing to secure Chinese knowhow while Ola, has sought relaxation of timelines for government incentives for cell production facing bumps to scale the country’s first operational giga-factory.
EVs already have the best design and driving experience, pack the most features and have the best technology upgrades. Tehran can help us drive past the EV tipping point. Time to recharge the policy batteries.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)