India's E-Mobility Transition Shifting Consumer Preferences and Speed Breakers Ahead

In this article, Anita Khuller discusses the targets and challenges for the implementation of e-mobility in India. She talks about various policy initiatives as well as the ways in which various states and cities in India are planning to promote and introduce electric vehicles in the country on a larger scale.

Anita Khuller

India is currently the fifth largest car market globally. The transport sector contributes an estimated 142 million tonnes of CO2 annually, of which 123 million tonnes are from the road transport segment alone. The anticipated growth in passenger vehicle usage will lead to a rise in the demand for fossil fuels, other adverse environmental impacts (air pollution), and increased oil imports. One of India’s plans to reduce pollution levels as per the Paris Climate Agreement is to introduce electric vehicles (EVs) in a big way.

There were 10 million electric cars on the world’s roads at the end of 2020. Electric car registrations increased by 41 per cent in 2020, despite the pandemic-related worldwide downturn in car sales, in which global car sales dropped by 16 per cent. Around 3 million electric cars were sold globally (a 4.6 per cent sales share), and Europe overtook the People’s Republic of China as the world’s largest EV market for the first time.

The resilience of EV sales in the face of the pandemic rests on three main pillars—supportive regulatory frameworks, additional incentives to safeguard EV sales from the economic downturn, and expansion of the number of EV models and lower battery costs.

Policy Initiatives

India too has made tremendous policy changes to meet its EV goals. It is a participant in the EV30@30 Campaign, which aims for the sales share of EVs to reach 30 per cent by 2030 among the participating countries.

The Indian National Electric Mobility Mission Plan 2020 (launched in 2013) outlines the roadmap for the faster adoption of EVs in India. Under this, the Department of Heavy Industry (DHI), Ministry of Heavy Industries & Public Enterprises, formulated the Faster Adoption and Manufacturing of (Hybrid &) EVs (FAME) scheme in India in 2015 to promote the development and sustainable growth of such vehicle technologies.

FAME II allocated $1.4 billion over three years from 2019 for 1.6 million hybrid vehicles and EVs (including two/ three-wheelers, buses, and cars), and includes measures to promote domestic manufacturing of EVs and their parts. But only 5 per cent of this has been spent till now, that is, ₹500 crore. This scheme will now be applicable till March 31, 2024. About 86 per cent of the program’s budget is earmarked for direct vehicle subsidies, which is expected to generate demand for 7000 battery electric vehicle (BEV) buses. The funding is expected to cover the costs of one low-power charger per bus and one fast charger for every ten buses. Under FAME, $133 million has also been budgeted for charging infrastructure. In October 2020, the DHI released an expression of interest (EOI) welcoming investors to benefit from the scheme and install a minimum of 1 charging station every 25 km along key highways and every 100 km to accommodate heavy-duty vehicles (HDVs). The results of this EOI do not seem to be publicly known.

As of June 2021, a total of 78,045 vehicles have been sold through the FAME India scheme, which includes 59,984 electric two-wheelers; 16,499 electric three-wheelers; and 1562 electric four-wheelers, as per https:// pmmodiyojana.in/.