Updated analysis of incentives for electrifying India’s four-wheeler ride-hailing fleet
Electrifying India’s four-wheeler ride-hailing vehicles: Policy experiences from abroad
The central government and several state governments in India have implemented consumer financial incentives that reduce the total cost of ownership gap between electric and conventional gasoline and diesel cars used as ride-hailing vehicles. Still, though, the uptake of electric vehicles has been slow across India, and none of the leading ride-hailing platforms have taken up initiatives toward decarbonizing their four-wheeler fleets the way they have in Europe and the United States. Therefore, introducing non-fiscal policy measures that supplement the financial incentives could help to drive electrification in ride-hailing businesses in India. This briefing reviews how select additional policies could help further bridge the gap between battery electric vehicles (BEVs) and gasoline and diesel cars. The focus is on non-monetary policies and policies adopted in the United States, China, and Europe, which are also key ride-hailing markets.
The authors identify nine non-fiscal policy measures implemented in markets outside India, and only one, labeling of electric vehicles, has been adopted in India so far. From this they suggest:
- Time-based non-fiscal measures specifically targeted at the electrification of the ride-hailing fleet at the regional or local levels can push the Indian market. Setting specific goals for electric vehicle adoption in regional passenger or ride-hailing transport fleets has been successful in cities like Shenzhen, Guangzhou, Zhengzhou, and Wuhan in China.
- Urban access regulation benefits at the local or regional level for already labeled commercial vehicles in Indian cities could aid quicker adoption of electric vehicles among ride-hailing fleets. Local or regional measures that regulate access to certain parts of a city and give preferential access to distinctly labeled BEVs while restricting the entry of internal combustion engine vehicles can motivate ride-hailing drivers to switch to electric cars. Many cities, including London, Paris, and Amsterdam, are adopting this policy and experiencing the benefits.
A multi-pronged policy approach at different government levels will likely be needed to spur the electrification of ride-hailing vehicles in India. Stringent CO2 and electric vehicle regulations can ensure investment from manufacturers and model availability, fiscal incentives can address consumer cost barriers, and charging infrastructure deployment can provide convenience and confidence for consumers. Non-fiscal policies as suggested here can provide complementary support.