New Vehicle Efficiency Standard will reduce CO2 from new passenger vehicles by 60% between 2025 and 2029

Last updated Jan 28, 2025

In recent interview with Dr. Shailendra Saroj – Chairman International Federation of electric vehicle association , Dr. Saroj explain about international EV policy

As of early 2025, several governments worldwide have implemented new and evolving policies to support the adoption of electric vehicles (EVs) as part of their efforts to reduce emissions, improve air quality, and accelerate the transition to renewable energy. These policies vary widely depending on the country, but here are some of the latest developments in key regions:

United States

Inflation Reduction Act (IRA) of 2022: This significant piece of legislation offers a variety of incentives to promote EV adoption. Key provisions include:
- EV Tax Credits: Consumers can receive up to $7,500 in tax credits for purchasing a new electric vehicle, with conditions on sourcing materials and assembly (e.g., the vehicle must be assembled in North America and meet specific requirements for critical mineral sourcing).
- Used EV Tax Credits: A tax credit of up to $4,000 is available for used EV purchases, aimed at making electric vehicles more affordable for a broader range of consumers.
- Consumer Incentives for Charging Infrastructure: There are provisions for rebates and tax credits to help individuals and businesses install home and workplace charging stations.
- Support for EV Manufacturing: The IRA provides incentives for companies that manufacture batteries, EVs, and related infrastructure within the United States.
- EV Charging Network Expansion: The federal government is investing in the expansion of a national network of fast-charging stations to alleviate “range anxiety.”
Biden Administration’s EV Goals: President Joe Biden has set a goal of having electric vehicles make up 50% of all new car sales in the U.S. by 2030, with additional funding allocated for research, development, and infrastructure.

European Union

Fit for 55: The European Union’s climate package, known as “Fit for 55,” aims to reduce greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels. Key provisions relevant to the EV industry include:
- Ban on Internal Combustion Engine Vehicles (ICEVs) by 2035: The EU has proposed a ban on the sale of new cars and vans powered by internal combustion engines by 2035. This policy is designed to accelerate the transition to electric mobility.
- EV Charging Infrastructure: The EU is investing heavily in expanding EV charging infrastructure, with a focus on building fast-charging stations along major highways and in urban areas.
- Battery Regulation: The EU is also working on new regulations aimed at improving the sustainability of batteries, including requirements for greater recyclability and the use of ethically sourced materials.
National Incentives: Individual EU countries offer additional incentives to consumers, including subsidies, tax rebates, and grants for purchasing electric vehicles and installing charging infrastructure.

China

Subsidies for EVs: China has been a global leader in promoting electric vehicles, offering substantial subsidies to consumers and automakers. However, the government is gradually reducing direct subsidies, with the focus shifting to other incentives.
Carbon Credit System: China operates a carbon credit system where automakers can earn credits for producing electric vehicles, which they can trade or use to offset their production of gasoline-powered cars.
EV Charging Infrastructure: The Chinese government is aggressively expanding EV charging infrastructure, aiming to have over 4.8 million charging points by 2025.
Zero-Emission Vehicle Mandate: China has set a goal for new energy vehicles (NEVs), which include electric, plug-in hybrid, and fuel cell vehicles, to account for 40% of total vehicle sales by 2030.
Local Incentives: Many Chinese cities offer local incentives for EVs, such as reduced registration fees, free parking, and access to bus lanes.

India

Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) Scheme: The Indian government has extended its FAME II scheme, which provides subsidies for the purchase of electric vehicles, with a focus on electric two-wheelers, buses, and four-wheelers. The scheme also offers incentives for setting up EV charging infrastructure.
Tax Benefits: Under the Goods and Services Tax (GST) regime, EVs in India are taxed at a lower rate (5%) compared to conventional vehicles (28%).
State-Level Policies: Several Indian states offer additional incentives such as road tax exemptions, subsidies for EV purchase, and support for local manufacturing of EVs and batteries.
Battery Manufacturing: India is looking to become a major hub for battery production through initiatives like National Mission on Transformative Mobility and Battery Storage, which aims to foster domestic manufacturing and reduce reliance on imported batteries.

The scheme you’re referring to appears to be part of India’s push towards greener and more sustainable transportation options. Based on the details provided, it aligns with various initiatives aimed at promoting electric vehicle (EV) adoption and supporting EV manufacturing within the country.

This specific scheme started in April 2024 and will end in July 2024, with a total budget of US$ 60.18 million (Rs. 500 crore). The main objectives of the scheme are:

Enhancing Green Mobility: This initiative aims to promote the transition to electric mobility, reducing dependence on fossil fuels, lowering emissions, and improving air quality.
Encouraging EV Manufacturing: It focuses on boosting domestic manufacturing of electric vehicles, including incentives for companies to invest in EV production and technology. This is likely to be part of India’s broader goal of becoming self-reliant in EVs and related components, such as batteries.
Support for EV Ecosystem: While the scheme’s exact details aren’t fully provided, schemes of this nature typically include:
- Subsidies and incentives for purchasing electric vehicles.
- Support for charging infrastructure to ensure easy access to charging points.
- Technology and innovation funding for the development of electric vehicle technology, including improvements in battery efficiency, range, and affordability.
- Green manufacturing policies to encourage the establishment of EV production plants and related industries within India.

Similar Previous Schemes:

In India, there have been other key schemes to promote electric mobility, such as the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme, which has provided financial incentives for purchasing EVs and building infrastructure. This current scheme might either build upon or complement the existing FAME scheme to further push the agenda of electric vehicle adoption in the country.

Expected Outcomes:

Increased EV Adoption: The scheme is expected to drive more consumers and businesses towards adopting electric vehicles.
Domestic EV Manufacturing: It could also help develop a robust local EV manufacturing ecosystem, reducing reliance on imports and encouraging innovation in EV technology.
Environmental Benefits: A significant reduction in carbon emissions and improved urban air quality.

This scheme is an important step toward India’s long-term goal of having a large portion of its vehicle fleet be electric, aligning with its broader climate change goals and push for green energy solutions.

United Kingdom

Ban on Sale of New Petrol and Diesel Cars: The UK government has set a firm target to ban the sale of new petrol and diesel cars by 2030, with hybrid vehicles allowed until 2035. The policy aims to encourage the switch to fully electric vehicles.
EV Charging Network: The UK has committed significant investments to build a comprehensive EV charging network, including funding for fast-charging stations along motorways and in urban areas.
Grants for EV Purchases: The UK has provided grants for consumers purchasing electric vehicles, although these are being phased out for higher-priced models, with more focus now on helping lower-income households.
Battery Recycling and Sustainability: The UK is exploring initiatives to improve the sustainability and recycling of EV batteries, aligning with its broader environmental goals.

Japan

EV Incentives and Subsidies: Japan provides incentives for both individuals and businesses to purchase electric vehicles, including subsidies, tax reductions, and low-interest loans.
2035 Target for All New Cars to Be EVs: Japan has announced plans to make all new cars sold in the country zero-emission vehicles by 2035. This includes both electric vehicles and hydrogen-powered vehicles.
EV Charging Infrastructure: The government has supported the growth of the EV charging infrastructure, aiming for a network that will support millions of EVs in the coming years.

Canada

Incentives for EVs: The Canadian government offers federal rebates of up to $5,000 CAD for the purchase of new electric vehicles and $2,500 CAD for used EVs.
Zero-Emission Vehicle Standard: Canada has announced plans to make 100% of new vehicle sales zero-emission vehicles by 2035.
Investment in Charging Infrastructure: The government is investing in EV charging stations across the country, particularly in rural and remote regions, to ensure comprehensive coverage.

Conclusion

Governments around the world are actively promoting the adoption of electric vehicles through a combination of tax incentives, subsidies, regulatory frameworks, and investments in infrastructure. The overarching goal for most of these policies is to reduce greenhouse gas emissions, improve air quality, and transition toward a more sustainable future. While specific policies vary, many countries share a commitment to accelerating the adoption of EVs as part of their climate goals.