Imagine booking a ride and finding an electric car waiting for you, clean, quiet, and emission-free. Sounds perfect, right? Yet despite the promise of a greener future, electric vehicles (EVs) are facing an uphill battle in India’s ride-hailing sector. And the recent case of BluSmart’s dramatic collapse serves as a cautionary tale about what happens when ambition meets reality on India’s roads.

At a recent panel discussion during the 18th Urban Mobility India (UMI) Conference & Exhibition  2025 in Gurugram, experts dissected the challenges hindering EV scale-up in India’s ride-hailing ecosystem. The findings reveal a complex web of financial, infrastructural, and policy barriers that are keeping electric mobility from becoming the new normal.

The High Cost of Going Green in India

Let’s talk money. The elephant in the room for EV adoption is simple: electric vehicles cost more upfront than their petrol or diesel counterparts. For ride-hailing drivers who operate on thin margins, this initial investment can be a dealbreaker.

Despite expectations that EV costs will decline over time, they remain a significant barrier especially for drivers with low credit worthiness who struggle to secure financing.

But the problem doesn’t end at purchase. The resale market for EVs remains indeterminate, leaving drivers worried about residual risk. What happens when they want to sell their vehicle in three or four years? Unlike conventional cars with established second-hand markets, EVs face uncertainty around battery degradation and outdated technology.

Infrastructure Gaps: The Chicken-and-Egg Problem for EVs

Here’s the catch-22: adequate charging infrastructure is pivotal for large-scale EV adoption. But currently, there’s a massive mismatch between EV growth and the growth of charging facilities in many regions across India.

For ride-hailing drivers, this translates into a brutal reality:

• Slow charging turnaround means hours of lost income
• Fear of running out of battery before reaching a charging station (range anxiety)
• Limited availability of charging points, especially in areas where they operate most

According to recent reports, despite new entrants like VinFast, Tata, and BYD entering the market, EV adoption in ride-hailing platforms remains disappointingly slow. The infrastructure simply hasn’t kept pace with the ambition IBEF.

BluSmart’s Cautionary Tale: When High Hopes Hit Hard Realities

BluSmart once stood as a beacon of hope for electric mobility in India. The all-EV ride-hailing service started strong with high consumer satisfaction, offering cleaner rides and reliable service. But by April 2025, it had abruptly suspended operations, leaving thousands of drivers stranded and users disappointed.

What went wrong? The presentation highlighted critical factors:

• Despite efficiency, high operational costs couldn’t be sustained
• Limited ecosystem support, including financing and infrastructure
• Its failure caused a downward spiral in EV availability on ride-hailing platforms

The BluSmart collapse serves as a stark reminder: even with consumer goodwill and environmental benefits, electric mobility companies cannot survive without adequate financial and infrastructural support, BBC News.

Financing Fiasco: The Money Problem in EV sector

Platforms are falling short of their EV acquisition targets, and the reasons are clear:

• Financing and leasing barriers make it difficult for drivers to afford EVs
• Low resale value creates additional financial risk
• Fragmented regulatory incentives across states create confusion

For a ride-hailing driver in Delhi, getting a loan for an EV might come with different terms than in Mumbai or Bangalore. This inconsistency makes planning and investment decisions incredibly difficult.

Policy Pathway: Carrot Over Stick

So what’s the solution? The conference panel emphasised a “carrot over stick” approach combining both enforcement measures and attractive incentives.

Government Incentives That Can Make a Difference:

• Tax waivers and GST reductions (currently, EVs attract 5% GST compared to 28% for conventional vehicles)
• Low-interest loans to reduce the upfront financial burden
• Toll exemptions to lower operational costs
• Subsidies under schemes like FAME India (Faster Adoption and Manufacturing of Electric Vehicles)

But here’s the critical piece: real-time, verifiable public dashboards are essential. Transparency in subsidy distribution, charging infrastructure deployment, and EV adoption rates can help build trust and enable better planning by all stakeholders, Invest India.

Transition requires both enforcement (stick) and inducements (carrot). Incentives such as tax waivers, low-interest loans, and toll exemptions can accelerate EV adoption sustainably.

The NCR Cannot Afford Further Delay

The panel’s conclusion was unambiguous: NCR cannot afford further delay. Pollution is not a statistic — it’s a survival threat.

For a region that regularly tops global air pollution charts, transitioning to electric mobility isn’t just an environmental goal; it’s a public health imperative. But achieving this requires more than good intentions:

• A collaborative push combining incentives, infrastructure, and innovation
• Coordination between the central and state governments to create consistent policies
• Private sector investment in charging networks and fleet operations
• Financial products tailored to the needs of gig economy workers

A collaborative push combining incentives, infrastructure, and innovation can make electric mobility the new normal.

What This Means for Commuters and Cities

For the average urban commuter, the slow pace of EV adoption in ride-hailing means continued exposure to vehicular emissions and noise pollution. Cities lose out on the potential for cleaner air, quieter streets, and reduced carbon emissions.

But there’s hope on the horizon. The PM e-Drive Scheme (which replaced FAME-II in 2024) provides ₹3,679 crore in incentives specifically targeted at electric two-wheelers, three-wheelers, and buses, crucial segments for urban mobility as per India Briefing.

The Road Ahead: Making EVs Work for Everyone

The path to electric mobility in India’s ride-hailing sector isn’t just about technology; it’s about creating an ecosystem where drivers can afford to go electric, find charging convenient, and make a sustainable living.

This requires:

1. Upfront capital support to bridge the cost gap
2. Fast-charging infrastructure along key routes
3. Battery swapping stations for quick turnaround
4. Buyback guarantees to address resale value concerns
5. Streamlined financing with lower interest rates

As India races toward its 2030 EV goals with a target of 30% electric vehicle penetration, cities like Delhi, Mumbai, and Bangalore will be the testing grounds. The lessons from BluSmart’s rise and fall, combined with insights from experts at forums like UMI 2025, provide a roadmap.

The question isn’t whether India will transition to electric mobility but how quickly we can create the conditions for it to succeed at scale.

For now, the next time you book a ride, that EV option might still be rare. But with the right mix of policy support, infrastructure investment, and industry collaboration, the future could be electric after all, just not quite as quickly as we’d hoped.

What do you think is the biggest barrier to EV adoption in your city? Share your thoughts in the comments below.

This article is based on insights shared at the 18th Urban Mobility India Conference & Exhibition, held in Gurugram. For more stories on sustainable urban mobility and policy analysis, stay tuned to Urban Voices.