Our EV subsidy policy is due for a full overhaul

livemint.com:

₹1.5 lakh threshold to qualify for state payouts. The idea of charging customers separately for a charger came in handy for some, enabling a lower vehicle price, but this dodge was called out by policy monitors. While grey areas may exist in letter over how the product is defined, the spirit of a qualifying price cap was clear all along.

The intent was to promote climate action with public funds, as EVs do not burn fossil fuels to run, but, as is typical of such state-funded programmes, other aims like job generation and luxury-use exclusion got hooked up with the EV subsidy as policy tow-alongs. Rule complexity is a weakness of such tools; regulatory riddles only enlarge the space for businesses to play on policy gaps and forge success in places other than the market. This summer’s EV slump is a setback from which the market can recover, no doubt, but the way this story has panned out illustrates the challenge of getting policy right.

Ideally, the state must not try to shape our markets. It should restrict its role to offering a level-playing field to all and let competitive forces of demand and supply lead a market’s evolution. This is a special case, however, as it is amply clear that climate action calls for market intervention.

Choking carbon emissions will require a state-led squeeze of fossil-fuel usage, even as our electricity grid is cleaned up, and if a central scheme can speed up EV adoption, it would help the cause. Ease-of-charging is a state responsibility too. Big shifts often need a visible hand of help.