As the hype of EVs are taking a foothold in every country’s automobile market, India too, has plans for large scale investments in EV market in India to drift towards electric mobility.
Planning to leverage declining reserves of natural resources to minimum as well as taking steps to combat climate change has given India a new target to achieve by 2030.
Many federal policymakers are developing a mobility option that is “Shared, Connected, and Electric” and have projected an ambitious target of achieving 100 percent electrification by 2030.
By making the shift towards electric vehicles (EVs), India stands to benefit on many fronts: it has a relative abundance of renewable energy resources and availability of skilled manpower in the technology and manufacturing sectors.
According to an independent study by CEEW Centre for Energy Finance (CEEW-CEF), the EV market in India will be a US$206 billion opportunity by 2030 if India maintains steady progress to meet its ambitious 2030 target. This would require a cumulative investment of over US$180 billion in vehicle production and charging infrastructure.
Another report by India Energy Storage Alliance (IESA) projects that the Indian EV market will grow at a CAGR of 36 percent till 2026. The EV battery market is also projected to grow at a CAGR of 30 percent during the same period.
Regardless of the country’s ambitious targets, EV market in India is at a nascent stage. However, looking at it differently – India offers the world’s largest untapped market, especially in the two-wheeler segment. 100 percent foreign direct investment is allowed in this sector under the automatic route.
The federal government is also prioritizing the shift towards clean mobility, and recent moves to amend the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME) II scheme to make electric two-wheelers more affordable, is a case in point.
Further, under the scheme, approvals have been granted for 6,315 electrical buses, 2,877 EV charging stations amounting to INR 5 billion (US$66.63 million) in 68 cities across 25 states/Union Territories and 1,576 charging stations amounting to INR 1.08 billion (US$14.39 million) across nine expressways and 16 highways.
Apart from benefitting from multiple production-linked incentive schemes, government plans to create a local manufacturing ecosystem to support goals around greater investments in EV Market in India.
This is sought to be achieved by incentivizing fresh investments into developing indigenous supply chains for key technologies, products, and auto components.