The threat of global warming is real and present. It is imperative for us to make eco-friendly choices that safeguard climate change and promote a clean life for the sustenance of the planet. Electric Vehicles are one alternative to living a pollution free and eco-friendly life. In recent years India has witnessed a surge in demand for EVs. The primary motivators to transition to EV are rise in fuel prices, rising pollution, consumer behaviour etc. India aims to convert almost 30 per cent of private vehicles into EVs by 2030.
EV penetration is going at a healthy pace thanks to the many demand incentives taken up by both the central and state governments like FAME Subsidy, Registration Fees Waiver, Road Tax Waiver, Income Tax Deductions etc. Especially in the E2W and E3W markets. In the E2W segment, the penetration of EVs in personal mobility is currently around 5 per cent from near zero in 2020. In the E3W segment, the EV penetration is around 50 per cent in the commercial space from 20 per cent in 2020.
This demand has attracted a lot of new and established players across the spectrum like Tata Motors, Hyundai, Kia, Citroen, Mahindra, Hero Electric, Bajaj Auto, TVS, Ather, Ola Electric to launch and line up multiple EV launches for the future.
Mass mobility is very critical for a populous country like India to have a big dent on the decarbonization goals envisaged. Electrification of Buses is also being done aggressively. This is also very clear with the recent announcement where the government has communicated that the FAME subsidy allocation for electric buses will be increased.
The Near Future
Indian Government Target of 30 per cent EVs on Indian roads by 2030 is expected to further accelerate EV adoption in the country. This needs a sustainable EV ecosystem to be developed in the country that ensures smooth demand and supply. Along with multiple demand-side incentives as mentioned earlier, the government is also providing multiple incentives and subsidies to develop the EV manufacturing ecosystem across power-train and multiple sub-components as well. PLI ACC and PLI Auto are two cornerstones to make India “Self-reliant”.
A robust battery charging infrastructure is pivotal to developing the EV ecosystem. The government revised consolidated Guidelines & Standards for charging infrastructure on 14th January, 2022 and increased their focus on providing incentives for the development of charging infrastructure across the country. NITI Aayog has released a draft of the battery-swapping policy, which is valid till March 2025. This will help in addressing the major obstacle that plagues the mind of an EV adopter, the range anxiety.
The recent Lithium find in J&K also gives huge hope and a needed fillip for the future of EV ecosystem development in India as this has the potential to bring down battery costs tremendously. Lithium is a rare element vital for manufacturing electric vehicles and electronics. Till now, India imported lithium which added to the cost of manufacturing electronics and EV. This will not just attract domestic manufacturers. But also, pave the way for International manufacturers to diversify their supply chains and set up new units outside of China.
The Never Again
It is highly unlikely that the fossil fuel-powered ICE vehicles will disappear completely from Indian roads, but their dominance in the market is likely to decline significantly thanks to the ambitious goals set by the government to reduce both energy dependence and air pollution levels of a nation that is poised to become the most populous in the near future.
The Indian EV market still faces several challenges, including high upfront costs and a lack of charging infrastructure in some areas, but the government's commitment to promoting EVs is expected to help overcome these challenges in the long term.
The EV sector is the future of the auto segment and there is an amassed transformation that is being witnessed globally. Governments are taking radical steps to ensure more people transition from ICE to EVs. EVs are not just eco-friendly, they have lower running cost, no congestion charges and better driving. EV has a lot to contribute to a clean and sustainable life.
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