An electric scooter rolls out of a showroom, its buyer sees the purchase incentive immediately. It might take someone to work or join delivery riders in traffic. Nearby, an e-rickshaw waits at a railway station as electric buses pass. India’s EV transition is increasingly visible. Less visible is the charging operator who must find land, secure a power connection, invest in equipment and wait for enough EVs to make a station viable. Both decisions are part of the same transition, but public policy moves one far faster than the other.
India has good reason to celebrate this first phase. Electric vehicles rose from 0.08 per cent of vehicle adoption in 2015-16 to 8.26 per cent in 2025-26. FAME-II supported the sale of 16.72 lakh vehicles. The government reported 26.59 lakh sold under PM E-DRIVE by June 2026. These are substantial gains. They also make a harder question unavoidable: are our incentives building a cleaner way to move people and goods, or mainly helping more people buy electric vehicles?
Why the ecosystem lags
A purchase subsidy tackled the early price gap. More buyers gave manufacturers the confidence to offer models and build scale. Yet a buyer hesitates if charging is uncertain, a charging firm hesitates if utilisation is low, a distribution utility needs a credible demand forecast before strengthening the local network. Bus operators need depots and reliable payments before ordering fleets. Battery makers need assured demand for cells and long-term finance. No single participant can profitably build the entire ecosystem ahead of everyone else.
This is a coordination problem, not simply a shortage of chargers. By August 2026, India had 67,657 installed EV chargers, including battery-swapping chargers (Ministry of Heavy Industries, 12 August 2026). However, the national figure says little about an apartment resident without home charging, a delivery rider losing income in a queue, or a bus depot awaiting a transformer. A charger can exist on a map and still be unavailable, incompatible or too unreliable to change a purchase decision.
The Centre has recognised the broader task. PM E-DRIVE sets aside Rs 2,000 crore for public charging and Rs 4,391 crore for 14,028 electric buses. As of July 1, however, Rs 689 crore had been approved for 6,562 chargers. Approval is a step towards installation, not an operating charging service. By July 22, the scheme had reimbursed Rs 2,281.94 crore in incentives for 23.23 lakh two-and three-wheelers, while the bus programme was still working through orders and concession agreements (Ministry of Heavy Industries, 28 July 2026). Vehicle subsidies are easier to turn into visible outputs than a functioning mobility network.
Pay for what completes the system
EV 2.0 should finance the links that allow adoption to sustain itself. Public agencies can assemble suitable land at bus depots, railway stations, markets and highway stops, and tender charging sites with clear rights of access. Distribution companies can publish connection timelines and planned feeder upgrades. The subsidy can help meet the upfront cost of transformers, cables and grid connections where private operators cannot recover it quickly. For neighbourhoods with weak commercial demand but strong public need, competitive viability-gap support can cover the early years, subject to uptime and usage targets.
These are not entirely new ideas. Uttar Pradesh offers a capital subsidy of 20 per cent, capped at Rs 10 lakh, to the first 2,000 qualifying charging stations. Tamil Nadu’s 2023 EV policy proposed relief on demand charges and cheaper daytime electricity for public charging, subject to regulatory approval. The lesson is to match support to the actual obstacle: site access, connection cost, the electricity bill or uncertain initial use. A blanket grant per installed charger cannot do all four jobs.
Battery supply deserves the same discipline. India’s Rs 18,100-crore production-linked incentive programme for advanced chemistry cells aims at 50 GWh of manufacturing capacity, with 40 GWh awarded to four firms by August 2026. But an award is not a working factory, and domestic battery-pack assembly is not the same as domestic cell production or secure mineral supply. Policy should track commissioned capacity, cell quality, material sourcing and the share of batteries collected at end of life. The Battery Waste Management Rules already place extended producer responsibility on producers. Enforcing collection and recovery is part of industrial policy as well as environmental policy.
The highest social return may come from vehicles that travel the most and serve the most people. An electric bus can lower tailpipe pollution along a crowded route while providing affordable travel to passengers who will never own an EV. Yet buying buses without depot power, route planning, maintenance and payment security will not deliver those benefits. FAME-II had put 5,299 electric buses into service by July 2026; PM E-DRIVE’s larger bus ambition now needs implementation capacity at city and state level. E-autos, delivery fleets and freight corridors also warrant support tied to actual service, not just registration.
Count journeys and emissions, not just sales
The familiar scoreboard is useful but incomplete: EV sales, subsidy disbursed, chargers installed, buses sanctioned. These are outputs. The outcomes people need are cleaner air, lower oil use, affordable travel and less climate damage. The UN Environment Programme’s ‘avoid, shift, improve’ framework offers a useful test: reduce unnecessary travel, make public and shared transport attractive, and clean the vehicles that remain. An electric car still takes road space and parking; its battery has a manufacturing footprint; its charging draws power from the grid. The public return depends on what it replaces, how far it travels and how its electricity is produced.
An EV 2.0 dashboard should therefore report four connected measures. First, actual service: electric bus-kilometres operated, passengers carried, electric commercial vehicle-kilometres and service reliability. Second, usable infrastructure: charger uptime, successful charging sessions, waiting time, utilisation and coverage in underserved areas, rather than a raw count of sockets. Third, environmental effect: petroleum displaced and estimated lifecycle greenhouse-gas emissions avoided, with transparent assumptions about the replaced vehicle, kilometres travelled, battery and local electricity mix. Fourth, public value: subsidy per tonne of emissions avoided and per passenger-kilometre served, alongside affordability and access. No single indicator can stand in for all of them.
This approach also links EV policy to the power sector. Charging during hours of abundant renewable generation can reduce costs and emissions, provided tariffs and local grid capacity make it practical. As the grid becomes cleaner, vehicles already on the road gain a further climate advantage. Battery recycling and repair must be visible in the same results framework. The idea of sustainability is straightforward here: an apparent gain at the tailpipe should not conceal costs shifted to electricity generation, mineral extraction or battery waste.
None of this requires abandoning purchase incentives. It requires knowing when a rupee spent on a vehicle, a feeder upgrade, a charger kept working or a reliable bus service produces the greater public benefit. India has helped create an EV market. The next test is whether it can coordinate the market, the grid and the city around better journeys. More electric vehicles are a welcome output; green mobility must be the outcome.
