Economic Survey 25-26: Govt schemes led Indians to embrace EVs as registrations rise

The Economic Survey for 2025-26, presented in Parliament on January 29, underscores the Indian government's strong commitment to the electric vehicle (EV) sector. This report highlights how specific government initiatives have significantly boosted EV registrations nationwide. By implementing targeted Production Linked Incentive (PLI) schemes, the government aims to foster a robust, self-sufficient manufacturing ecosystem that shifts India from an import-driven model to one marked by strategic resilience. The results of these supply-side measures, coupled with recovering demand, have led to a remarkable uptick in EV registrations across the country. The automotive industry is experiencing a transformative era, with the transition to electric vehicles contributing to nearly 33% growth in production over the last decade, from FY15 to FY25. Key PLI schemes have played a pivotal role in this transformation: 1. **National Programme on Advanced Chemistry Cell (ACC) Battery Storage**: This initiative is fundamental to India's EV strategy, concentrating on the crucial and costly component of electric vehicles—the battery. The government has earmarked an impressive Rs 18,100 crore to establish domestic manufacturing capabilities for 50 Giga Watt Hours (GWh) of Advanced Chemistry Cells, with 40 GWh already awarded, thereby bolstering the EV ecosystem. 2. **Scheme to Promote Manufacturing of Electric Passenger Cars in India (SMEC)**: Launched in March 2024, this program seeks to draw investments from international EV manufacturers while positioning India as a key manufacturing hub for electric cars. It allows for the temporary import of high-value electric four-wheelers at reduced customs duties, provided that a minimum investment of Rs 4,150 crore ($500 million) is made, alongside achieving mandated Domestic Value Addition targets. As the government targets the passenger car segment, it aims to initiate a widespread shift toward electric mobility. The automotive sector's significance is further highlighted by its contribution of approximately 15% to India's total GST collections, marking it as a crucial pillar of the economy. This surge in electric vehicle registrations is also reflected in public infrastructure advancements, such as the Kochi Water Metro, which utilizes LTO battery-powered electric-hybrid ferries—a model now being expanded to 21 other Indian cities.