India seeks to achieve about 40 % cumulative electric power installed capacity from non-fossil fuel-based energy resources by the year 2030, the same year India commits to cut its emissions by half, based on their pledge in COP26. Electric vehicles appear to be the way forward for Indian transportation and the government both at the federal and sub-regional levels has been making spirited efforts to transition to electric vehicles in a mission mode. The State of Delhi is experimenting at scale with the introduction of electric buses and it is estimated that in the next 2 to 3 years, the majority of commuters will transition to public transport including electric buses and metro rails through a combination of incentives and penal measures already in the works at the policy levels.
Based on data available by the Ministry of Road Transport and Highways, as of 3rd August 2022, a total of 13,92,265 Electric Vehicles (EVs) are being used on roads throughout the country.
Three-wheelers stand at the highest number of electric vehicles at 7,93,370, followed by two-wheelers at 5,44,643, and finally, four-wheelers and above at 54,252 as of 3rd August 2022. Furthermore, the sale of EVs in FY 2021-22 has gone up three times compared to the sale of EVs in FY 2020-21 to 1,34,460 sales in the past year with the government taking a number of steps to boost the adoption of electric vehicles.
On 12th May 2021, the government approved the Production Linked Incentive (PLI) scheme for the manufacturing of Advanced Chemistry Cell (ACC) in order to bring down the prices of batteries in the country. A drop in battery prices will result in a cost reduction for electric vehicles. Electric Vehicles are eligible for incentives under the PLI scheme for automobile and auto components, which was approved on 15th September 2021 with a budgetary outlay of USD 5 billion for a period of five years.
Taxes on electric vehicles have also been reduced from 12% to 5%; the tax on chargers/charging stations for electric vehicles has been reduced from 18% to 5%. The Ministry of Road Transport & Highways (MoRTH) announced that battery-operated vehicles will be given green license plates and be exempted from permit requirements with a notification advising states to waive road tax on EVs, which in turn will help reduce the initial cost of EVs.
A recent study by Arthur D Little titled Unlocking India’s electric mobility potential estimates that more than 30% of vehicles in India will be electric by 2030 with the EV industry crossing 10 million vehicles by 2030 with an adoption rate of 30% across categories. The study further reveals that India will need approximately 800 GWh of batteries by 2030 to be able to secure the 30 % EV adoption rate. For this, the country is accelerating plans to manufacture lithium-ion cells. India has had its share of challenges in infrastructure issues including charging facilities. Despite that, however, India is one of the largest EV markets in Asia, second only to China, and is surprisingly ahead of Japan.
This Post was submitted by Climate Scorecard India Country Manager Pooran Chandra Pandey