India is grappling with the third-worst air quality globally and is home to 42 of the top 50 most polluted cities in the world. A recent UN report paints a stark picture of the global climate crisis, attributing much of the crisis to fossil fuel pollution. Embracing the urgent call to combat climate change, India has set an ambitious timeline for Net Zero transition.
In this journey, India’s commitment to electric vehicles (EVs) is a beacon of hope amidst multiple challenges. With over three million EVs already on the roads, India stands at the forefront of the global shift to sustainable transportation. Supportive policy measures such as GST reduction and FAME incentives have played a crucial role in popularising EVs, empowering users to embrace these vehicles for their multiple benefits.
India’s EV revolution gathers pace
The enthusiastic adoption of EVs in India reflects a paradigm shift in consumer behaviour and mobility patterns. While EV adoption was initially driven by environmentally-conscious early adopters, the EV customer profile has evolved significantly, driven by superior driving performance, ease of maintenance, and operating cost savings. EV owners often act as brand evangelists – building communities, raising awareness, and catalysing further adoption through their shared experiences. In addition, the robust growth of charging infrastructure in the country, now exceeding 12,000 publicly accessible chargers, has contributed to driving customer confidence in EVs.
EV penetration is particularly pronounced in cities and regions where infrastructure, policy support, and consumer awareness intersect, establishing them as hotspots for EV adoption. Kerala, Delhi and Karnataka, which boast EV adoption of nearly 2x the national average, foretell the growth of EVs pan-India with state support, charging infrastructure and active owner communities.
Tailwinds fuelling EV expansion
Driven by a combination of improving market readiness and a fast-growing economy, EV adoption is set to soar. India’s economy, boasting a 7.3% GDP growth rate, has secured a place as the world’s fastest-growing large economy, on track to surpass the USD 5 trillion mark in the near future. This economic dynamism provides fertile ground for a significant increase in passenger car ownership in the country, creating an opportunity for EVs.
The market opportunity for EVs comes at a time when various perceived barriers for EV adoption are being addressed in a holistic manner.
All major OEMs in India plan to introduce EVs within the next 18 months, which will result in a plurality of choices across price points and body styles for customers. Charging infrastructure is set to more than double this year, based on announcements of OMCs and CPOs, and is set to further grow multi-fold over the next few years. With the initial fleet of EVs set to go through their first resale cycle, the residual value of EVs will also be established, providing comfort to value conscious customers. With the propagation of EVs across small towns in India, more late adopters will experience EVs and develop comfort in the technology. In addition, rising fuel costs, heightened environmental awareness, and continued government support will further propel EV adoption in the coming years.
Electric Vehicles herald a sustainable, and job-rich future
The affordability of EVs is on the brink of a transformative shift, driven by advancements in indigenisation and the scaling of battery cell production. As battery prices decrease and manufacturing efficiencies improve, the acquisition cost of EVs is expected to become increasingly competitive with traditional ICE vehicles. This cost parity, combined with the lower operating expenses for an EV, would make a compelling case for mainstream car buyers. Furthermore, the integration of clean renewable energy sources like solar power with EV charging infrastructure makes EVs even more sustainable. India is seeing a record demand for rooftop solar systems, and this clean energy transition is poised to drive down operational costs and further catalyse EV adoption.
As the EV industry continues to grow, it will have a ripple effect of positive outcomes, creating job opportunities and contributing to a greener, more sustainable future. The shift will play a significant role in reducing carbon emissions, combating climate change, and fostering a cleaner environment for future generations. The synergy of India’s high public transport mode-share and the anticipated 30% EV sales holds the potential to save a substantial Rs 1.2 lakh crore from its crude oil import bills. In addition, the EV sector can generate up to five crore jobs by 2030, according to the Ministry of Skill Development and Entrepreneurship. Now is the time for all stakeholders in the ecosystem to come together to support greater adoption of EVs, and thus help address a national imperative in cleaning our air and combating global climate change. With the combined efforts of industry players, policymakers, and consumers, the growth of the EV sector promises to bring about a transformative change towards greener mobility and a more sustainable automotive landscape.
Shailesh Chandra is the MD of Tata Motors PVs and Tata Passenger Electric Mobility.