With climate change and air pollution becoming increasingly pressing issues, governments around the world are implementing policies to accelerate the adoption of electric vehicles (EVs). President Biden’s goal of having 50% of all new vehicle sales be electric by 2030 is a prime example of such efforts. In India, the government has set a 30% EV adoption target for the country by 2030, aiming to reduce pollution and fossil fuel imports.
Government Incentives and Policies
Various government incentives and policies have been crucial in driving the demand for EVs. For instance, President Biden’s Inflation Reduction Act adds and expands tax credits for purchases of new and used EVs, while also providing incentives to electrify heavy-duty vehicles like school buses. In India, the extension of the FAME II scheme is critical to accelerating the adoption of EVs, especially 2-wheeler EVs, which can help achieve national targets of reducing carbon emissions.
Challenges and Solutions
Despite government incentives, challenges such as higher prices of EVs, lack of charging infrastructure, and supply chain problems persist. To address these issues, governments can provide tax incentives, low-interest loans, and other financial support to accelerate EV adoption in smaller cities. Developing local supply chains and manufacturing capabilities can create job opportunities and reduce the cost of EVs, making them more affordable for consumers.
Global Efforts and Regulations
The Biden administration plans to implement stringent auto pollution limits to increase electric car sales, with a goal for all-electric cars to make up 67% of new passenger vehicles sold in the US by 2032. This proposed regulation would be the federal government’s most aggressive climate regulation. Similarly, the European Union has enacted emissions standards expected to phase out gasoline-powered vehicles by 2035.
Impact on the Environment and Economy
An ambitious vehicle electrification pathway can help reduce tailpipe emissions by 18-50 percent, depending on the pollutant. EVs currently emit between 19-34 percent less greenhouse gas emissions over their entire life cycle, as compared to traditional internal combustion engine cars. Increased adoption of EVs in Tier-2 and Tier-3 cities can drive economic growth and development, creating new business and job opportunities in manufacturing, supply chain, and charging infrastructure.