Some members of the Indian automobile industry are reportedly opposing the proposed ban on the sale of fossil fuel-driven two- and three-wheelers. Whether the government institutes an outright ban, or imposes stringent emission norms or high taxation levels, it is very clear that at some point, it will need to substantially reduce fossil fuel vehicles plying in Delhi.
The fact of the matter is that pollution kills many Indians. It is harmful to India’s reputation as a dynamic, forward-looking society. The worse off suffer more, while the better off pollute more.
The only question, therefore, is not whether, but when. Incumbent industry tends to oppose such changes for a variety of reasons, including (a) the loss of revenues as the switchover happens, (b) costs of shifting to new product lines and discarding old ones, and (c) the fear that other new firms may have technology advantages over the incumbents.
The problem is that these challenges will remain whether we switch now or ten years later. Policymakers must also be asking themselves how long the government should listen to industry.
Newspaper reports point to several arguments against a rapid switchover. Let us review the major ones and whether and how they could be addressed.
The biggest challenge to quick EV rollout is the lack of charging facilities or battery exchange facilities. But 2028 is roughly two years away; surely, we can put up charging points in parking lots, petrol pumps, and public spaces across the city. This is the least of the problems for a city like Delhi that has quality power infrastructure, space, and also the capacity for a rapid rollout of charging points.
Some people believe that greater dependence on EVs will make India more reliant on imports from China, whether for magnets, battery anodes and cathodes, or associated critical minerals and rare earths. That is a flawed argument for many reasons. First, India is a large two- and three-wheeler market, and currently we are only talking about Delhi, which accounts for less than 3 per cent of national two-wheeler sales.
Second, EVs in fact reduce India’s global vulnerabilities, whereas fossil fuel vehicles increase them. Why? Because batteries and magnets are not consumables, even if their imports stop, EVs already on the road will continue to ply; this is not the case with fossil fuel-driven vehicles.
Third, India has a mechanism of keeping petroleum stockpiles; there is no reason why it can’t do the same for rare earths or critical minerals, and indeed India’s National Critical Mineral Mission envisages precisely this.
And fourth and most important, China possesses the greatest processing capacity for critical minerals and rare earths because it is also the largest consumer of these materials. It’s a virtuous cycle. The Indian government is putting in great efforts, as highlighted in the Union Budget of 2026-27, to enhance access to and processing capacity for critical minerals and rare earths, and these supply initiatives will need greater domestic demand to succeed.
Another concern is related to the loss of jobs for mechanics involved in the repair and maintenance of fossil fuel-driven vehicles. Here as well, the government is proposing to stop the registration of new vehicles post 2028. All the older vehicles will continue to need the services of such mechanics. Moreover, new EVs will also create jobs for other services. Remember the fears surrounding computerisation in banking?
It is also believed that EVs, despite government subsidies, are more expensive and therefore delivery workers, own-account workers and others dependent on two- and three-wheelers will end up paying more. Here as well, the argument is flawed. Work at CSEP has shown that the lifetime costs of electric two-wheelers are significantly lower than those of their petrol counterparts, and in fact, these workers will gain from the switch to EVs. The higher purchase cost, if a real concern, can be addressed through slight tweaks to the government’s collateral-free credit programs. Much of the gig economy has already embraced electric two-wheelers.
And finally, there is always a tendency for those who don’t want change to argue for sufficient time. It is not clear how much additional time that would entail. You don’t need to be an expert to know that at some point, Delhi will need to shift to low- and zero-emission vehicles. In fact, the ruling party’s 2025 election manifesto promised to halve AQI by 2030. Even earlier, many policymakers have publicly called for moving to EVs. The writing has been on the wall for more than a decade.
The Indian automobile sector includes some of the most respected firms in India. And these firms need to come up with a more forward-looking and solution-oriented plan. They will no doubt have stranded assets when production lines are changed from fossil fuels to electric ones; for this, they could be asking the government for accelerated depreciation.
Dependence on China is a concern, and the industry needs to increase R&D spending to reduce that dependence. Industry could also work with the government on various stockpiling solutions in the interim. Lack of adequate charging facilities will also impact use, and this industry should be proposing innovative ideas for ramping up charging facilities.
Reuse and recycling of batteries is another challenge area, and here as well, there are many mechanisms where industry can use its deep networks in providing a hand to the government in accelerating change.
India’s automobile industry needs to up its game.
Bhandari heads CSEP. Views are personal
The industry could also work with the government on interim stockpiling solutions. It should be proposing innovative ideas for ramping up charging facilities; bringing utility companies into the conversation would help, since they would be a major gainer. 
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