India is now the world's third-largest automobile market, with its automotive sector accounting for 7.1% of gross domestic product, 8% of the country's total exports and providing direct and indirect employment to more than 19 million people. With the automotive sector currently undergoing an electrifying transformation, India is on track to fulfil its commitment to the United Nations Convention on Climate Change (UNFCCC), aiming to reduce emissions intensity by 45% from the 2005 level by 2030. Recent reports suggest that the country's greenhouse emissions rate has dropped by 33% in 14 years.
The rise in popularity of electric vehicles among the public and the business communities in the post-pandemic world has significantly altered the overall landscape of the automobile industry in India. A large number of auto makers both domestic and foreign have shown interest to invest in electric vehicles, recognizing them as the sustainable transportation choice of the future.
The electrification of vehicles is gaining unprecedented momentum in India and this rise of EVs holds immense scope. This seismic shift to EVs has attracted the attention of global automakers. For the logistics sector, this trend means a paradigm shift towards eco-friendly transport options boosting the demand for electric commercial vehicles. In fact, India has been moving towards green automotive technology with a remarkable speed. Electric vehicles sales reached a record 1.53 million units in 2023 an increase of more than 50% over about one million units sold in 2022. EVs accounted for 7.3 % of the total automobile sales according to the ministry of road transport and highways (Vahan Dashboard). India has over 2.7 million registered EVs as on September, 2023).
Growth of India's auto sector
This story is from the February 1 - 29, 2024 edition of BUSINESS ECONOMICS.
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This story is from the February 1 - 29, 2024 edition of BUSINESS ECONOMICS.
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