[Answered] What are the arguments for and against providing subsidies for hybrid vehicles in comparison to electric vehicles (EVs)?

India’s road transport sector, responsible for about 12% of the country’s CO₂ emissions, is the third largest greenhouse gas emitter after the energy and agriculture sectors. FAME aims to boost demand for EVs and hybrids through retail subsidies, support the manufacture of components, and develop a nationwide EV ecosystem.

Arguments For Subsidies for Hybrid Vehicles

• Bridge to EV Adoption: Hybrids serve as an intermediate step for consumers transitioning from traditional internal combustion engine (ICE) vehicles to fully electric vehicles. They help ease range anxiety and infrastructure limitations.
• Diverse Consumer Needs: Hybrids may appeal to a broader audience, including those who are not ready to fully commit to EVs due to concerns about charging infrastructure, range, or initial cost.
• Reduced Emissions: Hybrids offer immediate reductions in fuel consumption and emissions compared to traditional ICE vehicles, contributing to short-term environmental goals.
• Infrastructure Readiness: Hybrids do not rely as heavily on charging infrastructure, which is still developing in many regions. This makes them more practical in areas with limited EV charging stations.
• Lower Costs: Hybrids are generally less expensive than EVs, making them more accessible to a larger segment of the population.

Arguments Against Subsidizing Hybrids over EVs

• Complete Emission Reduction: EVs offer the potential for zero emissions, especially when charged with renewable energy sources. Subsidizing EVs aligns with long-term goals of reducing greenhouse gas emissions and combating climate change.
• Technological Advancement: Subsidizing EVs can accelerate advancements in battery technology, charging infrastructure, and overall vehicle efficiency, driving down costs and improving performance over time.
• Higher Efficiency: EVs are generally more efficient than hybrids, as they convert more energy from the grid to propulsion compared to the combined internal combustion and electric systems in hybrids.
• Market Signal: Subsidies for EVs send a strong signal to automakers and consumers about the future direction of the automotive industry, encouraging investment in EV technologies and infrastructure.
• Global Trends: Many countries are setting ambitious targets for phasing out ICE vehicles and promoting EVs. Aligning subsidies with these goals helps ensure consistency and international cooperation on environmental objectives.

Conclusion

Finally, policies must evolve with the changing sectoral landscape & aim towards zero-emissions vehicles because that will help India reach its climate and energy security goals.