'Electric Car Subsidies Needed': Parliamentary Committee Recommends Consumer Incentives for EVs Under PM E-DRIVE Scheme

A parliamentary committee has recommended that the government introduce direct consumer subsidies for electric vehicles (EVs), cautioning that without such support the country's four-wheeler EV market will struggle to gain meaningful traction beyond early adopters. The Department-Related Parliamentary Standing Committee on Industry, which sits in the Rajya Sabha and is chaired by Tiruchi Siva, said the substantially higher purchase price of electric cars relative to petrol and diesel equivalents continues to put buyers off -- yet the segment receives no support under the government's principal EV incentive scheme, PM E-DRIVE.

"In the absence of a consumer-oriented subsidy, the transition in the four-wheeler segment -- particularly among middle-class and private buyers -- may remain slow and sub-optimal," the committee said, as reported by Business Today.

The committee also called for regular assessments of whether the Automotive Production-Linked Incentive scheme is actually feeding through into lower showroom prices and broader consumer access.

The panel urged the Ministry of Heavy Industries to move quickly to establish a targeted, time-limited consumer incentive for electric four-wheelers, either within the existing PM E-DRIVE framework or via a purpose-built sub-scheme. It further advised that any such incentives be tied to measurable criteria -- battery capacity, energy efficiency, and price ceilings -- to maintain fiscal discipline while narrowing the affordability gap between electric and combustion-engine cars.

The ₹10,900 crore PM E-DRIVE scheme has so far delivered results almost exclusively in the electric two-wheeler and three-wheeler categories, the committee found. "By contrast, electric trucks (e-trucks) and electric buses (e-buses) have recorded nil achievement, and the electric rickshaw/electric cart (e-rickshaw/e-cart) segment has reached only 3,602 units against a revised target of 39,034. Electric ambulances (e-ambulances) also remain at zero," it said.

On two-wheelers — the one bright spot — the committee recommended extending demand incentives through to 31 March 2028, the scheme's end date, but with a gradual wind-down built in to prevent sudden disruption to a segment that has demonstrated strong uptake and on which many livelihoods depend.

The committee also turned its attention to the Scheme to Promote Manufacturing of Electric Passenger Cars in India, which was designed in part to attract Tesla but has so far failed to draw a single applicant. It recommended a thorough review of the scheme in dialogue with both international and domestic industry players, suggesting that investment requirements, localisation timelines, and incentive terms may all need revisiting -- provided the underlying aims of building domestic production capacity and curbing import reliance are not compromised.

More broadly, the panel flagged deep concern about India's exposure to imported rare earth materials and critical minerals, a supply chain dominated by a handful of nations and most significantly by China, which controls a commanding share of both mining and processing globally. Beijing's recent export restrictions on key rare earth magnets have already created supply chain bottlenecks. 

The committee further stressed that batteries represent the single largest cost element of any electric vehicle, making home-grown advanced battery manufacturing essential to bringing down EV prices, securing energy supply chains, and positioning India competitively in global export markets.