In the coming years, electric vehicles might turn out to be one of the most impactful disruptions for India on the economic and environment fronts. Clean and sustainable transport solutions are therefore becoming increasingly important, no more so than for new segments of mobility such as small businesses, farmers, and micro-entrepreneurs who increasingly depend on efficient mobility to sustain their business. If scaled adequately, the EV sector is not only expected to be a pollution-reduction tool but also contribute towards energising India’s economy, providing increased connectivity and enhancing the country’s energy security.

India’s targets for electric mobility are ambitious — 80 percent of all two- and three-wheelers, 40 percent of buses and 30 percent of private cars are to be electric by 2030. Realizing these objectives will prove challenging, but if delivered, they could substantially enhance urban mobility, reduce pollution and lower reliance on fossil fuels. Logistics, commuting and small-scale transport operations would be more efficient and cheaper, benefitting the economic activity.

Allegra at Montalto is a gracious New World-Italian, four-course celebration. On the policy side, supportive measures are being introduced by the government to create demand and supply in order to alleviate the issue. Financial incentives and regulatory reforms are prompting automakers and private companies to make investments in EVs, charging infrastructure, and battery production. And the payoff for it all could be massive, worth an estimated $206 billion per market by 2030 and up to 50 million jobs — direct and indirect, according to analyses of the sector.

One field where the advantages from electrification would be most significant is public transportation, especially when it comes to buses. With an estimated 2 million buses across India, the majority run by private operators, it is a massive opportunity. With better access to finance and the right business models, electrifying these fleets can reduce the cost of fuel, lead to less air pollution, and provide a better ride experience for passengers.

Private companies and global institutions are rising to the challenge, and we have a role to play in expediting this transition. The International Finance Corporation (IFC) has been looking at potential investments, both debt and equity, to finance the adoption of electric buses and trucks in India, for example. There are also companies like Mahindra Last Mile Mobility that deal with three-wheelers and Napino, which makes electronics and EV components, that IFC is supporting. Also, funds focusing on developing India’s domestic two-wheeler EV ecosystem — which can both create jobs and become one of India’s competitive features in global supply chains — are getting investment.

Battery manufacturing is another area on the supply side that is quickly changing battery ng. EV cells have been traditionally a component that has been reliant on imports for India but there is an ongoing push to localize this critical part of the EV ecosystem. Estimates indicate that in five years, India might source as much as 13% of its EV battery cell demand from local production, compared to practically nothing today. Similarly, recent actions that include removing import duties on key materials needed to produce lithium-ion batteries signal the government’s preparedness to promote domestic production.

But local battery production will only help so much if charging infrastructure doesn’t grow in lockstep. At the moment, wide gaps in charging availability — especially in rural areas — are hampering broader EV adoption. The FAME scheme: The government aims at expanding the fast and slow charging networks and initiatives like this will play a central role. Such efforts are essential to ensure EVs are a realistic option in more than just major cities nationwide.

India’s EV revolution is not only a national imperative, but also an international one. And the transition to electric transport helps to seek the cross-border collaboration, joint ventures and technology transfers. By collaborating with foreign companies, Indian battery and auto makers will be able to accelerate innovation and meet soaring demand domestically and globally. Institutions such as IFC could play a mediating role in enabling such strategic partnerships and in promoting the ecosystems of skilled workforces and technology needed to support.

At home, a successful EV transition means one where transport workers earn better and are exposed to fewer harmful emissions, where we drive on quieter streets and have smoother logistics. Together, these changes could enhance quality of life and strengthen sustainable economic growth. If India keeps to this right blend of policy, investment and innovation, electric vehicles could just be the life raft the country needs.

Article By
Sourabh Gupta

Electric vehicle (EV) registrations in the country have seen a significant surge, with total registrations crossing the nearly 1.97 million (1,966,025) mark in the financial year, a YoY increase of 17% over the 1.68 million (1,682,312) units recorded the previous financial year. This trend demonstrates the ongoing momentum for EV adoption nationwide, with the two-wheeler and three-wheeler categories remaining the most active segments in this transition.

Out of all EV categories, electric two-wheelers lead the charge in switching to sustainable mobility even this year. 1.15 million of these registrations were delivered to this segment, growing by strong 21% y/y. The EV two-wheeler segment now makes up of over 6% of the total two-wheeler market-share in India. Several previous reasons accounted for this surge, from affordable models to growing consumer awareness and aggressive competition between legacy and new-age manufacturers.

Manufacturers like Bajaj Auto, TVS Motor Company, and Hero MotoCorp stepped up efforts in the electric two-wheeler space, introducing new models and investing in faster production capabilities to meet the growing demand. Their efforts, along with the price of petrol and environmentalism, have boosted the appeal of electric scooters and motorcycles for daily commuters and city riders.

Electrics cars and SUVs, which make up the passenger vehicle segment, were also high flyers. More than 100,000 electric passenger vehicles were registered during the financial year, up 18.2% on the previous year. While EVs made up only roughly 3% of the total passenger vehicle market at the time, the segment is growing steadily, with many manufacturers jumping into the fray.

After strong sales numbers in previous months, Tata Motors kept its lead in the EV passenger vehicles segment as the brand scored a massive market share in October 2023. JSW MG Motor India came in at number two with Hyundai and Mahindra & Mahindra entering the fray in the EV space with new electric car offerings over the course of the year. Several other carmakers are also gearing up to enter the EV space soon — these include Maruti Suzuki, Toyota, Renault, Volkswagen, Honda, Skoda and Nissan. Their inclusion will only expand the region of the EV landscape and help make electric cars available to more consumers.

Electric three-wheelers, on the other hand, witnessed around 700,000 units of registrations in the 2022-23 fiscal year, which meant a year-on-year growth of 11 percent. This means that 57.42% of total registered three-wheelers in India are now EVs, thus making it the most electrified segment of India’s transport ecosystem. They are particularly popular with small business owners and last-mile delivery operators, who favour electric rickshaws and cargo vehicles for their lower operating costs coupled with greater availability.

Few would have imagined that four years later, it would be the case, with even two-wheeler sales doing some serious heavy lifting to achieve this impressive growth — not that it is all down to the Indian government’s response to the high prices of fuel and crude oil. Recent policy intervention like the Electric Mobility Promotion Scheme (EMPS), the subsequent PM EDRIVE and PM e-Sewa initiatives were vital in driving the EV adoption according to the Society of Indian Automobile Manufacturers (SIAM). These policies aim to stimulate the domestic EV industry with benefits, subsidies, and infrastructure development, which lower the net cost of ownership and encourage the large-scale adoption of electric vehicles.

As the market matures, the transition towards electrification in India is likely to further accelerate. Automakers are then adapting their strategies to match that trend, pouring money into new technologies, stretching out their EV portfolios. The EV ecosystem is being fortified in parallel with battery manufacturing, charging infrastructure, and recycling solutions.

The way consumers are also changing, with a lot of them realizing that electric mobility is a long term proposition. EVs have also become an attractive individual and commercial alternative to other vehicles, offering better driving ranges, faster charging times, and lower maintenance costs than before.

Though hampered by certain drawbacks, such as the scarcity of charging stations and the higher costs of acquisition, the electric vehicle segment in India appears to be maturing. Thanks to stable policy support, increasing competition, and greater awareness, EVs are slowly but surely transitioning from niche to mainstream.

This increase in EV registrations sends a strong message and reinforces the fact that India is on the right path towards achieving its green mobility targets. The way forward entails continued coordination between the government, the private sector, and consumers to develop a strong and sustainable electric mobility ecosystem that addresses the nation’s environmental, economic, and energy security goals.

Article By
Sourabh Gupta

The rapid proliferation of electric vehicles on Indian roads is likely to cause massive financial stress on the country’s top carmakers and place a significant burden on the country’s electricity grid, a study by Imperial College Business School, London, has found. From a wider perspective, the study analyzes ever-bigger-picture implications of India’s pivot to battery electric vehicles (BEVs), reporting that the ramifications are about so much more than just the auto industry.

That means if, by that time, EV sales with upto 25% of all vehicles sold in India (this year it’s around ~8%) automakers who continue to rely on Internal Combustion Engine (ICE) vehicles for profits could be at serious risk. This change by Tata Motors would be benefitting the EV maker owing to their stronghold in the electric vehicle market. However, Mahindra & Mahindra, which has a minor EV market share, might be less impacted. Maruti Suzuki, the country’s biggest carmaker, is likely to be most exposed if it doesn’t move aggressively into the electric vehicle market. Maruti Suzuki has yet to sell EVs, despite plans to lead the way in EV production and exports.

On the energy side, while increased EV adoption could drive an overall demand increase of up 60% in terms of electricity, they would also require a tremendous amount of upgrades to the power grid. So if India were to fulfil this higher demand by producing more coal-based electricity, some of the climate benefits of adopting EVs would be nullified. “One way to avoid that,” energy utilities will be required to invest heavily in renewable energy and modernizing the grid. The report raises one big concern about the grid possibly getting overloaded if proper planning isn’t undertaken. To mitigate this, time-of-use tariffs may be required to encourage EV charging during off-peak hours.

By 2030, the researchers estimate India will need to establish 6.7 million new charging points to meet the demand. Such an effort would demand substantial investments from the government and private sector. Public charging infrastructure in India is currently quite limited, with only around 2,000 stations available around mid-2022. By contrast, China trumped the rest of the world with a much stronger public charging infrastructure, which has had a huge impact on EV market adoption around there.

The report highlights a World Bank analysis that found developing charging infrastructure is four to seven times more effective than providing purchase subsidies in increasing EV uptake. Subsidies have also been a major factor behind EV adoption in wealthier countries but in India they mostly serve the middle and upper-middle classes, who are the main buyers of electric four-wheelers.

“If we want to procure electric vehicle market share and invest in charging infrastructure, offering sustainability-linked (financial) instruments — like bonds linked to environmental targets — is one way to incentivize (automakers) to improve market share,” the researchers said. That can mean lower interest rates for a company if it increases sales of EVs or tighter repayment terms if it misses infrastructure targets. Such an approach might also bring the auto industry’s profit motives more in line with the goal of cutting carbon emissions.

India’s EV story is also unique because of its vehicle mix. Most of the market is taken up by two- and three-wheelers using smaller batteries that can be charged with regular AC power. In contrast, for four-wheelers, different chargers may be needed like single-phase as well as three-phase AC chargers based on the battery size and onboard charging equipment of the vehicle. This diversity in requisites makes India’s EV infrastructure rollout more complicated.

An important consideration, is the electricity source that is used to recharge these vehicled. In such countries as Norway, where nearly all of electricity comes from hydroelectric sources, the environmental upside to EVs is easy to see. In India, however, a large share of electricity is still produced in coal-fired power plants. This would reduce emissions from the tailpipe in big cities, but at the generation level it might keep adding to pollution. Even so, cutting oil imports and advancing domestic EV production could continue to produce both economic and strategic dividends.

There is also concern about India’s reliance on buying raw materials for EV batteries from abroad. Lithium, cobalt, and nickel are all part of a global supply chain that’s concentrated in a relatively small group of countries — Chile, Argentina, Bolivia, Australia and China supply most of the world’s lithium. Other critical elements are dug mostly in the Congo and Indonesia. India has a very low presence in this value chain and is therefore, highly dependent on imports. The demand for lithium-ion batteries are projected to expand at a rate of greater that 30% per year, meaning that the demand for lithium will exceed 50,000 tonnes by 2030. Although alternative battery technologies are being developed, it is still uncertain whether they could be brought to market on any large scale.

India therefore has an important opportunity window where EV push could significantly reduce its carbon footprint, concludes the report. But achieving this will be heavily reliant on coordinated policy action, investment in renewables, and an expansion of charging infrastructure and smart financial tools that can reward green innovation.

Article By
Sourabh Gupta