Electric vehicles promise zero emissions and a reduction in pollution in cities or countries across the globe. In India, the use of e-vehicles has the potential to bring a huge opportunity to the country’s economy. According to NITI Aayog, the Indian Electric Vehicle Industry could cumulatively add about US$300 billion by 2030. Over the last few years, this type of vehicle has seen unprecedented growth around the world. Last year, the overall internal combustion engine (ICE) vehicle sales have seen a significant fall, recorded the steepest drop in 19 years with vehicle sales across categories dipping 18.71 percent.
In India, most cities count among the world’s 20 most polluted cities, forcing governments to tackle pollution on a war footing. Millions of protesters all around the world, in 2019, took to the streets demanding justice on severe climate change.
Opportunity
The electric vehicle is a big opportunity for India and manufacturers in the country. Battery-powered EVs with zero tailpipe emissions can be a good alternative to ICE vehicles. Though the country’s emerging EV sector has notched attractive numbers as there were 7.6 lakhs EVs sold in the fiscal year 2018-19, compared to just 56,000 units in the previous fiscal.
While the industry is largely led by two-wheelers (16.4 percent) and three-wheelers (83 percent), BloombergNEF report shows, electric cars are expected to grab a 6 percent share of the new car sales by 2030 and 28 percent by 2040. This will make India the fourth-largest passenger EV market in the world.
Considering a report, 90 percent of car owners in India keen to switch to EVs, if the right infrastructure is provided. However, it also reveals that the current electric car ownership is just 1 percent of total vehicle sales in the country, of which 95 percent of sales are electric two-wheelers.
Steps Toward EVs
As almost 80 percent of all vehicles sold in India are two- and three-wheelers, NITI Aayog is striving to curtail ICE 2-wheelers under 150cc by 2025 and 3-wheelers by 2023. The Modi-led government is now prioritizing more on the shift to electric mobility. In the Union Budget 2019, Finance Minister Nirmala Sitharaman allocated Rs 10,000 crore to the Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme.
Moreover, with Budget 2020, the government intends to make India a hub of electric vehicles. In this move, the Central government announced a series of measures including a whopping US$1.4 billion worth manufacturing hub. However, as pushing the country to make the fourth-largest EV market by 2040, there are several impediments along the way.
According to reports, the EV manufacturers want the government to provide easy finance for electric vehicles. That would intensify the demand for environment-friendly vehicles. In addition, the makers also want the government to incentivise private buyers of electric and hybrid cars that would boost the sale of electric as well as hybrid vehicles.
Currently, key players in automotive and charging infrastructure, and batteries and mobility service providers have taken several steps to fuel industry action. Several companies are designing and experimenting with products suitable for the Indian market with a key focus on two-wheelers and three-wheelers.
In this context, Ola, an Indian taxi company, for instance, introduced “Mission: Electric” to integrate 10,000 e-rickshaws and electric auto-rickshaws into its fleet. The automotive giant Mahindra and Mahindra is investing Rs 18 billion over the next three years into EV production to boost its four-wheeler production. Furthermore, several other manufacturers are collaborating with states to drive their public transport systems.
