Geographies in Depth

How can India transition to electric vehicles? Here's a roadmap

Binota Gayen, 45, rides an electric rickshaw carrying passengers in New Delhi, India, October 5, 2018

Electric rickshaws are part of the plan Image: REUTERS/Anushree Fadnavis - RC1EAB4B3A50

Richa Sahay
Manager, First Movers Coalition, World Economic Forum
This article is part of: India Economic Summit

On 20 September, millions of young protesters all around the world took to the streets to demand climate justice for our future generations. Such a call for action has never been louder. In Delhi, one of the most polluted cities in the world, thousands of protesters asked their national leaders for “Eco, not ego”. So how are Indian leaders stepping up to the challenge?

Reducing tailpipe emissions from urban transportation is critical to address climate change. According to the International Council for Clean Transportation, an estimated 74,000 premature deaths were attributable to air pollution from transportation tailpipe emissions in India in 2015. As the number of motor vehicles on the roads double every 8-10 years in India, CO2 emissions are bound to get worse. With India’s goal to reduce oil dependency while solving the challenge of energy scarcity, moving towards renewable and clean sources of energy are at the top of the national agenda.

India is going electric

Electric vehicles promise zero tailpipe emissions and a reduction in air pollution in cities. The Indian government has created momentum through its Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles schemes that encourage, and in some segments mandates the adoption of electric vehicles (EV), with a goal of reaching 30% EV penetration by 2030. The scheme creates demand incentives for EV and urges the deployment of charging technologies and stations in urban centers. If these aims are realised by 2030, they will generate an estimated saving of up to 474 Millions of tonnes of oil equivalent (Mtoe) and 846 million tonnes of net CO2 emissions over their lifetime.

Various fiscal demand incentives have been put in place to spur the production and consumption of EVs and charging infrastructure - such as income tax rebates of up to INR150,000 ($2,100) for customers on interest paid on loans to buy EVs. To scale production of lithium-ion cell batteries, there will be an exemption from customs duties to bring down their cost.

Electric car sales are accelerating worldwide - how should India keep up?
Electric car sales are accelerating worldwide - how should India keep up? Image: International Energy Agency

Assuming the appropriate infrastructure is in place, 90% car owners in India are willing to switch to EVs, according to a survey by the Economic Times in May 2019. At present, however, EV market penetration is only 1% of total vehicle sales in India, and of that, 95% of sales are electric two-wheelers.

The automotive industry players and charging infrastructure, batteries and mobility service providers have taken various actions to ramp up industry action. Companies are designing and testing products suitable for the Indian market with a key focus on two-wheelers and three-wheelers. Ola, an Indian taxi company, has launched “Mission: Electric” to integrate 10,000 e-rickshaws and electric auto-rickshaws into its fleet. Car manufacturer Mahindra and Mahindra is investing INR18 billion over the next three years into EV production to ramp up its four-wheeler production. Other manufacturers are forging partnerships with states to augment their public transport systems. Some of the lightweight motor vehicles manufacturers such as Hero Motorcorp, Bajaj Auto and TVS remain unequivocally aligned with the government’s vision; however, they are proposing a more cautious, clear and realistic roadmap towards the adoption of EVs. To meet the government's new Bharat Standard-VI emission regulations will cost the car industry an estimated INR70 billion - and with the mandate to replace conventional internal combustion engines within the next five years, companies are feeling the burn on their balance sheets. Battery manufacturers such as Amara Raja are taking concrete steps towards enhancing its research and development capabilities to develop battery packs for electric mobility. Indian Oil, National Thermal Power Corporation and Tata Power have big plans to proliferate electric charging stations throughout cities.

Diverse states of India

To scale the deployment of EVs, state government and local transport authorities are critical. To complement this central government thrust, 10 states and union territories have published draft or final policies aligned with the economic and demographic realities of each region.

Varied approaches have been taken. For example, given Delhi’s air pollution issues and status as a high-employment hub, Delhi’s policy targets the components of electric vehicles that have achieved parity in terms of life cycle and total cost of ownership with internal combustion engine (ICE) vehicles. It also aims to create jobs for battery swapping operators. Karnataka, meanwhile, with technology hubs like Bengaluru, aims to become an EV manufacturing hub and to invest in research and development for battery manufacturing. Kerala is focusing on electric trains, electric buses, and on using energy-efficiency systems. Tamil Nadu, lauded for its comprehensive policy, has also created an EV venture capital fund while providing tax exemptions for manufacturing and land subsidies, as well as allocated parking spaces for EV in commercial spaces. Every state has a different approach to solving its own environmental challenges.

Have you read?
Moving differently but together

Bringing transportation decisions closer to the people is understandable and necessary. Transport challenges such as congestion, affordability, infrastructure and transit systems availability are localized issues. Consumer preference for more expensive EV would highly depend on citizens’ income levels. Since investment in local research and development is necessary to bring prices down, it makes sense to leverage local universities and existing industrial hubs.

However, the ecosystem of multi-stakeholder players will need to plan future production based on a clearer understanding of local objectives and plans. Especially for a huge country with vast aspirations, a critical element is missing - an objective evaluation of the states’ various policies using a common denominator. To address this gap, the World Economic Forum and the Ola Mobility Institute have supplied a value-chain framework with three integrated value chains - electric vehicles, charging, and the surrounding network - to all 10 of the Indian states and union territories that have drafted policies around EV. This framework ensures that within each state’s policies, overall sustainability is considered from cradle to grave. It also helps to highlight the gaps in the value chain that need investment and further policy attention.

Operationalizing this mass transition to electric mobility for a country of 1.3 billion people is not an easy feat. Thus, a strong common vision, an objective framework for comparing dstate policies and a platform for public-private collaboration are needed. These levers will allow leaders to show clear action to our future generations.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Stay up to date:

Mobility

Related topics:
Geographies in DepthSupply Chains and TransportationEnergy Transition
Share:
The Big Picture
Explore and monitor how Mobility is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

How hydrogen powered vehicles will help India reach its emissions targets 

K.R Jyothilal and Narendra Nath Veluri

December 6, 2024

BRICS: Here’s what to know about the international bloc

About us

Engage with us

  • Sign in
  • Partner with us
  • Become a member
  • Sign up for our press releases
  • Subscribe to our newsletters
  • Contact us

Quick links

Language editions

Privacy Policy & Terms of Service

Sitemap

© 2024 World Economic Forum