The analysis stressed that sustained investment in infrastructure and a phased, region-specific policy approach are essential to meet the government’s EV30@30 target — which aims for 30% of all vehicle sales to be electric by 2030.
“From a policy-making perspective, our findings suggest that even moderate policy support, when paired with robust infrastructure, can significantly boost EV adoption,” the report stated.
Lack of charging infrastructure a major hurdle
A key obstacle to the wider adoption of electric vehicles (EVs) in India continues to be the lack of adequate charging infrastructure.
To assess the readiness of different states, an EV Charging Index was developed, offering a comparative view of charging infrastructure across India. Among the top five states with the most robust infrastructure, three — Karnataka, Goa, and Maharashtra — are located along the southwest coast. The other two, Delhi and Haryana, represent northern India.
The report highlights that, beyond introducing EV policies, many states have actively worked to improve their charging networks. Several states — including Andhra Pradesh, Assam, Bihar, Chhattisgarh, Gujarat, and Kerala — are offering capital subsidies of 25–60% on the cost of setting up EV charging stations. Delhi has gone a step further, providing a 100% grant for the purchase of charging equipment.
State level policies are critical
Highlighting the critical role of state-level policies, the RBI analysis finds that financial incentives, tax waivers, and infrastructure investments are key drivers of EV adoption — particularly in a price-sensitive market like India.
The report’s statistical models show a positive and significant relationship between policy implementation and 2W-EV uptake. Two panel regression models were used to assess the role of infrastructure, introducing a dummy variable to represent states with the best charging networks. The first model covered the top seven states; the second expanded the analysis to the top 12.
Both models indicate that the interaction between policy support and strong infrastructure has a multiplier effect on adoption — though at lower significance levels — suggesting that charging infrastructure enhances the effectiveness of policy measures.
Incentives drive adoption
The report also compares the impact of aggressive versus moderate demand incentives on EV adoption. States were grouped accordingly.
Findings show that aggressive monetary incentives — such as direct subsidies and waivers on registration and taxes — significantly boost adoption. Even in states offering only moderate incentives, adoption rates improved when these were combined with strong infrastructure.
Further model specifications confirmed that the interaction between moderate policy support and robust charging infrastructure remained statistically significant. This reinforces the importance of a balanced approach combining financial incentives with infrastructure development.
Subsidies and incentives play a critical role in influencing consumer behavior — particularly in the EV sector, where high upfront costs can be a barrier.
Several studies have shown that monetary incentives such as rebates, tax credits, and reduced registration fees effectively promote EV adoption by lowering initial purchase costs. In markets like Europe, targeted fiscal incentives have narrowed the price gap between EVs and conventional vehicles, making EVs more accessible to consumers.
