Centre will electrify its own fleet, states should follow example, says Tarun Kapoor, adviser in the PMO

New Delhi: The Union government is planning to use electric vehicles (EVs) for its operations, and will urge states to follow suit, Tarun Kapoor, adviser in the Prime Minister’s Office (PMO) said on Tuesday. 

States will be incentivized to electrify their government fleets through interest-free loans from the Centre, Kapoor told the EV industry at the FICCI National Conference on Electric Vehicles in New Delhi

Kapoor said the industry needs higher goals to promote faster adoption and penetration of the zero-emission vehicles.

“We will try to encourage government purchases for EVs,” said Kapoor. “We are working on that so that the government’s own usage gets EVs as soon as possible. We are trying to motivate the states also to do this,” he said. 

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States will be encouraged to convert their fleets into EVs using the interest-free loans they receive from the Centre.

While this is not the first such a push for government-led electrification of transport—Uttar Pradesh in 2023 set a target of 100% government EV penetration by 2030—it comes at a time when India is strengthening its electric vehicle ecosystem

The hope is that the public spending will stimulate further electric vehicle sales.

It follows the launch of the PM E-drive EV subsidy scheme in October, which provided electric two-wheelers, three-wheelers, buses, trucks and ambulances at subsidized prices to consumers. 

However, in this scheme, the government did not offer subsidies for electric cars.

Small share of EVs

As per a February 2022 Lok Sabha disclosure by the ministry of road transport and highways, a mere 5,384 government vehicles out of 847,544 were electric—0.63% of the total. The Central government used 578 EVs out of a fleet of 98,461 amounting to 0.58%, while state government s had even fewer at 0.31% of their fleets (1,237 EVs out of 386,758 vehicles).

These figures are likely to have risen in the last two years, as electric vehicle penetration has surged. Sulajja Firodia Motwani, chairperson of the FICCI Electric Vehicle committee, on Tuesday said India’s EV penetration is approximately 7.3-7.5% today due to persistent efforts from both government and industry.

Adoption of EVs in government operations assumes importance because of the opportunities it presents. It is likely to help reduce the country’s dependence on crude oil imports and, in turn, the chokehold of harmful emissions.

Consumers appear to be backing the demand for zero-emission vehicles.

Rising consumer demand for electric three wheelers has prompted the ministry of heavy industries to end their subsidy under the PM E-Drive scheme, Mint reported on 19 November.

As many as 167,137 EVs were sold in October and November this year after PM E-drive subsidies were announced, according to the government’s Vahan portal. 

Vahan portal data also shows 346,042 three-wheeler EVs were sold in FY25, after the union government’s Electric Mobility Promotion Scheme—a subsidy scheme before PM E-drive—was activated on 1 April 2024.

For indigenous manufacturing

The minister of heavy industries H.D. Kumaraswamy, also speaking at the FICCI national conference on EVs, called for more indigenous manufacturing of EV battery components. “We need to manufacture anodes and cathodes as well as other battery components locally, and the ministry is willing to discuss the same with all stakeholders,” Kumaraswamy said.

“Given the scale of this proposed transition, it will really accelerate the deployment of charging infrastructure and in turn accelerate India’s transition to EVs across cities,” said Kunal Mundra, founder and CEO of Electrifi Mobility, a Gurugram-based company for EV financing solutions.

“The other side-effect of such a large-scale deployment is that it will be a catalyst for growth in the domestic EV manufacturing ecosystem across vehicles, batteries and charging which is a fantastic outcome for Make-in-India.” 

He added, “It is critical that the government invests this money not only towards the right vehicles but also towards ensuring their infrastructure and ecosystem partnerships can maintain these vehicles effectively and ensure utilization throughout the assets’ useful life. If they can truly run these assets for their entire life of 7-8 years, then this will create a direct positive environmental impact. The best way to ensure this outcome is for the government to do this in phases over months if not years.”