The electric vehicle (EV) promotion approaches of India and Germany both exist, yet differ in policy design and market maturity.
India’s focus is on mass adoption and affordability of EVs to enable a broader population to access them. In contrast, German EV policy is primarily geared toward decarbonisation (i.e. reducing carbon emissions) and premium adoption (i.e. accelerating the transition to EVs) within the traditional automotive industry’s more mature market, which is growing.
The design of India’s EV programmes is price sensitive and geared toward volume sales, while Germany’s is predominantly based on infrastructure and reducing emissions, consistent with its more developed economy and its more aggressive climate change targets.
Subsidies and Financial Incentives
India’s EV subsidy framework takes shape predominantly through government funding programmes, such as the FAME India Scheme (Faster Adoption and Manufacturing of Electric Vehicles), which includes:
- Direct EV subsidies for two- and three-wheeler vehicles and passenger cars;
- Various state-level incentives such as road tax exemptions, registration exemptions;
- Lower GST charged on EVs than what is currently charged on petrol vehicles (i.e. 5% on EVs, versus 28% for petrol vehicles).
- As a result of these incentives, the cost of EVs (primarily for two- and three-wheeler vehicles) is becoming very affordable for consumers.
- Germany’s EV subsidy framework is based on similar programs such as the Umweltbonus (Environmental Bonus), although the available benefits have been declining in recent years, and include the following:
- Incentives for purchasing passenger EVs (previously worth €6,000 – €9,000);
- Tax exemptions on EV ownership; and strong corporate incentives for company fleets and corporate leases.
Infrastructure and Long-Term Strategy
Germany is the leader in charging infrastructure and the enforcement of stricter electric vehicle (EV) standards than their neighbor countries. They have a very well established and extensive network of public charge points; plus they have imposed strict limits on carbon emissions from transportation, encouraging the use of EVs.
India’s charging infrastructure is growing quickly, but is still far behind Germany’s. The government is focused on improving EV charging networks and battery manufacturing through initiatives such as the production-linked incentive scheme (PLI scheme).
Thus, there are two distinct differences between the two nations:
- India → EV mass adoption via subsidies
- Germany → EV mass adoption driven by infrastructure
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Final Words
India and Germany are pursuing two different approaches to accomplish the same goal: EV mass adoption. India is currently using subsidies to buy large amounts of EVs over a short time period. Germany is focused on developing a self-sustaining EV ecosystem that will grow and flourish through the mirroring strategies used by these two countries.
In summary, the future will most likely consist of two phases or cycles for all countries pursuing EVs worldwide: an initial phase when there will be large amounts of subsidies used to support the initial growth of EVs in order to facilitate future sustained growth through the development of strong charging infrastructure.
FAQs
1. Which country offers higher EV subsidies?
Germany historically offered higher per-vehicle subsidies, but India provides stronger affordability support relative to income levels.
2. Is EV pricing lower in India due to subsidies?
Yes – especially in two-wheeler vehicles, with subsidies arriving in the form of direct cash assistance and reduced taxation.
3. Are there subsidies being reduced in Germany?
Yes, as there are already a lot of EV’s being adopted, Germany is now focusing on building the required infrastructure and establishing regulations for operating EVs.
4. Are there more EVs in India than in Germany?
Yes – demand & affordability for two-wheeled vehicles is contributing to this growth in India.
