 India has the fifth largest car market across the world, and with continuous rapid growth, it can come within the top three in the near future, with about 40 crore customers in need of mobility solutions by 2030. However, the increasing number of automobile customers shall not imply an increase in the consumption of conventional fuels.
With the rapid increase in petrol and diesel fuel prices, the Indian government is religiously pushing for the introduction of Electric Vehicles (EV), which will ensure a cleaner environment and reduce India's oil import bills in the near future.
Lately, there is a growing consensus among automotive professionals and the public alike that the future of vehicles is electric, and India's recent deal with Australia to source critical minerals will help its endeavour to produce electric vehicles.
India is among a handful of countries that support the global EV30@30campaign, which aims for at least 30 per cent of new vehicle sales to be electric by 2030. India's advocacy of five elements for climate change -- "Panchamrit" -- at the COP26 in Glasgow is committed.
Various ideas were espoused by India at the Glasgow summit, such as renewable energy catering to 50 per cent of India's energy needs, reducing carbon emission by 1 billion tonnes by 2030 and achieving net-zero by 2070.
The government of India has taken various measures to develop and promote the EV ecosystem in the country, such as: the remodelled Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme; Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) for the supplier side; the recently launched PLI scheme for Auto and Automotive Components for manufacturers of electric vehicles.
By 2030, 80 per cent of two and three-wheelers, 40 per cent of buses, and 30 to 70 per cent of cars in India will be electric vehicles, according to the NITI Aayog. As the nation gears toward its 'Zero-emission' 2070 dream, funds and focus are directed toward electric mobility.
In March 2022, Minister for Road Transport and Highways Nitin Gadkari mentioned in the Parliament that between 2019-2020 and 2020-2021, the two-wheeler EVs rose by 422 per cent; three-wheelers by 75 per cent and four-wheelers by 230 per cent. The number of electric buses also increased by over 1,200 per cent. The push for EVs is also expected to play an important role in the local EV manufacturing industry for job creation.
Additionally, through several grid support services, EVs are expected to strengthen the grid and help accommodate higher renewable energy penetration while maintaining secure and stable grid operation.
Opportunities for Battery Manufacturing and Storage: With recent technology disruptions, battery storage has a great opportunity in promoting sustainable development in the country, considering government initiatives to promote e-mobility and renewable power (450 GW energy capacity target by 2030).
The Ministry of Power has prescribed at least one charging station to be present in a grid of 3 km and at every 25 kms on both sides of the highways.
India's Ministry of Housing and Urban Affairs, under the Model Building Bye-laws, 2016 (MBBL), has mandated setting aside 20 per cent of the parking space for EV charging facilities in residential and commercial buildings and such an example is worth emulating by developing economies.
Until EVs become affordable, the Indian government has stepped in with a host of incentives under the umbrella FAME 2 Scheme. The level of incentives now on offer for EVs in India are the highest ever -- up to Rs 32,000 for electric two-wheelers, Rs 3 lakh for electric cars and Rs 35-55 lakh for buses. There is an additional income tax rebate on loans taken for buying electric cars.
As per a study by the CEEW Centre for Energy Finance (CEEW-CEF), the market opportunity is worth nearly USD 206 billion (Rs 14,42,000 crore), with cumulative EV sales in all vehicle segments projected to jump to over 100 million units by FY30. It has been estimated that over USD 180 billion (Rs 12,50,000 crore) investment will be required in vehicle production and charging infrastructure until 2030, and this presents a huge opportunity for foreign investors. |
