Working Paper
Optimizing supply-side regulations to advance India’s zero-emission vehicle transition
India is the world’s fourth-largest vehicle market and one of the fastest growing. The country is rapidly emerging as a global hub for zero-emission vehicles (ZEVs). The transition to ZEVs also offers an opportunity for India’s vehicle manufacturing sector to expand and become a global leader in new automotive technologies. Backed by forward-looking initiatives like FAME, PM E-DRIVE, and PLI, the country is making strides in both EV manufacturing and adoption. However, sustaining this growth with subsidies alone could be costly and inefficient.
This new ICCT research paper explores how well-designed supply-side regulations (SSRs)—such as CAFE standards as well as ZEV sales requirements—can complement India’s existing policy mix to deliver lasting benefits for the economy, industry, and environment, all at a limited cost to the government. Incorporating lessons learned from leading EV markets, like phasing down super credits and incorporating a trading system, could bolster India’s position in the global EV transition and draw in investments in the ZEV supply chain and charging infrastructure.