Abstract:

Feebates—market-based, revenue-neutral, and size-neutral—can act as an important policy lever in support of India’s “leapfrog” vision of an electric, shared, and connected mobility system by incentivizing the production and use of clean vehicles, according to a new report. A feebate is a mechanism by which inefficient or polluting vehicles incur a surcharge (fee-) while efficient ones receive a rebate (bate-). By offering a steady price signal, feebates can encourage and accelerate the growth of a new mobility system by encouraging Indian consumers to purchase clean vehicles and for Indian manufacturers to produce them, while speeding the retirement of inefficient vehicles. Because it is technology-neutral, feebates also can be applied to two-, three-, and four-wheeled vehicles.