India’s electric vehicles (EV) market is likely to cross one crore units annual sales by 2030, stated Economic Survey 2022-23 on Tuesday.
It said the EV market will create five crore direct and indirect jobs. In December 2022, India became the third-largest automobile market, surpassing Japan and Germany in terms of sales, said the survey tabled in Parliament on Tuesday.
“The automotive industry is expected to play a critical role in the transition towards green energy. The domestic electric vehicles (EV) market is expected to grow at a compound annual growth rate (CAGR) of 49 per cent between 2022 and 2030 and is expected to hit one crore units of annual sales by 2030,” it said.
As per industry estimates, the total EV sales in India stood at around 10 lakh units in 2022.
Further, the survey said, “The EV industry will create 5 crore direct and indirect jobs by 2030. To support and nurture this development, the government has undertaken multiple steps”.
The pre-Budget document also highlighted that the automobile sector is a key driver of India’s economic growth.
“In December 2022, India became the 3rd largest automobile market, surpassing Japan and Germany in terms of sales,” it added.
In 2021, India was the largest manufacturer of two-wheeler and three-wheeler vehicles and the world’s fourth-largest manufacturer of passenger cars.
“The sector’s importance is gauged by the fact that it contributes 7.1 per cent to the overall GDP and 49 per cent to the manufacturing GDP while generating direct and indirect employment of 3.7 crore at the end of 2021,” it said.
Under the government’s Faster Adoption and Manufacturing of Electric Vehicles (FAME) II scheme, between 2019 and 2024, with a budget outlay of Rs 10,000 crore, the survey said the scheme has incentivised 7.1 lakh EVs, sanctioned 7,210 e-buses out of which 2,172 e-buses have been deployed until December 2022.
The scheme had envisaged supporting 1 million two-wheelers, 0.5 million three-wheelers; 55,000 cars and 7,090 buses.
The survey also pointed out the rising sales of auto components.
According to the Automotive Component Manufacturers Association of India (ACMA), the auto components industry witnessed a 34.8 per cent growth to Rs 2.65 lakh crore in the first half of 2022-23, riding on domestic demand, particularly from the passenger vehicles segment.
During the period, exports of components grew by 8.6 per cent to USD 10.1 billion (Rs 79.03 lakh crore), while imports climbed 17.2 per cent to USD 10.1 billion (Rs 79.8 lakh crore).
The industry clocked a turnover of Rs 4,20,621 crore in 2021-22, up from Rs 3,40,733 crore in 2020-21.
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The new EV policy will also do a rethink on state subsidy to add to the FAME 2 incentives. This is something a number of states, especially Haryana, are adopting to fast-track electric mobility. Already, the Tamil Nadu government has announced road tax carrots for EVs as part of demand-side incentives.