The Indian EV startup navigating short-lived government subsidies

Earlier this year, the Indian government discontinued its popular EV subsidy, the Faster Adoption and Manufacturing of Electric Vehicles (FAME). The program, under which the government subsidized the cost of EVs for consumers, has been credited among the top reasons for the rise of the EV industry in India.

Prashant Vashishtha, founder and chairman of Sokudo Electric India, which manufactures e-scooters that received benefits of FAME, says “short-lived subsidies” can hamper the industry’s growth.

This interview has been edited for clarity and brevity.

How has the change in government subsidies affected India’s EV makers?

It is not the number of subsidies but their continuity that supports EV makers. Typically, policies announced for the long term provide us with the necessary push to experiment with our products, plan long-term strategies, implement changes in production, and foster innovation. Their continuity helps sustain investor confidence and attracts new investments.

Short-lived policies or subsidies whose allocations are reduced during their tenure can hamper this flow and affect industry growth.

Who should be responsible for improving India’s EV charging infrastructure? 

The public-private partnership model could be a practical road map that helps scale the EV charging networks, especially in smaller cities. A clear collaboration where both parties know their roles and responsibilities can pool their strengths and resources to address the challenges. 

With lesser government support, what are the alternative financing options for EVs?

Some cleantech financial companies offer battery leasing, vehicle leasing, retail loans, and even subscription models to fleet and retail buyers, playing a key role in driving EV adoption. When it comes to in-house financing, only a few players extend financing options like leasing, loan, or subscription-based purchase options.

Subsidies to support manufacturers and incentivize sales may encourage more companies to offer such financing options directly to consumers or fleet owners.