Fast-Tracking Electric Vehicle Adoption in India

Fast-Tracking Electric Vehicle Adoption in India

India is at a stage in its path for sustainable growth where decisions must be made. As one of the largest and fastest-growing economies in the world, the nation must strike a balance between economic development and environmental stewardship.

As EV usage has increased globally, India has set lofty goals for EV penetration in order to meet this challenge. However, with only 1.32% of India’s registered vehicles being electric vehicles in FY 2021–22, reaching the stated goal of 30% EVs by 2030 will require cooperation from all parties, including the public, commercial sector, and consumers.

Current Market Scenario

In order to increase EV adoption, India’s current EV ecosystem includes both potential and obstacles. The majority of India’s vehicle market is made up of 2- and 3-wheelers, which make up about 80% of all vehicle sales, despite the fact that major Indian and foreign automakers like Hyundai, Kia, and Mercedes-Benz offer a wide choice of EV 4-wheeler models.

Surprisingly, just one million of the 250 million 2- and 3-wheelers on Indian roads are electric. However, India saw a jump in EV registrations in FY 2022–23 alone that exceeded one million, with electric two-wheelers accounting for 62% of EV sales.

Projections for EV Adoption in India

The projections for EV adoption in India are promising. The government’s ambition to achieve 30% electrification of the automobile industry by 2030 reflects a commitment to sustainable transportation. Projections indicate that by 2030, a staggering 10 million EVs could be sold annually, reflecting a compelling compound annual growth rate of 49% in the years ahead.

Certain states that have taken proactive measures by offering robust policy frameworks and establishing necessary infrastructure to expedite this transition are already reaping the rewards. A case in point is Delhi, which reported a remarkable 16.8% of total vehicle sales attributed to EVs in December 2022. This impressive statistic underscores an 86% year-on-year growth, showcasing the tangible impact of supportive measures. Crucially, the prevailing government policies align harmoniously with India’s ambitious target of achieving 30% EV penetration by the year 2030. Notably, the 2023-24 budget earmarked a substantial INR 35,000 crore for pivotal capital investments, strategically aimed at facilitating the transition toward net-zero energy objectives.

Furthermore, a noteworthy development is the noteworthy 80% augmentation in allocation for the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-II) scheme. This significant increase translates to enhanced subsidies and promotional incentives designed to catalyze the adoption of EVs. These strategic endeavors vividly illustrate the government’s resolute dedication to crafting a sustainable future and nurturing the proliferation of EVs across India.

As India has made commendable strides in the realm of electric mobility. The number of EVs on Indian roads has been steadily increasing, owing to growing awareness of environmental issues, government incentives, and improved charging infrastructure. However, despite these advances, EVs account for a modest fraction of the total vehicles in the country.