E-Mobility Space in India

India’s Growing Focus on Electric Vehicles to Deal with Air Pollution and Oil Dependency

The move towards Electric Vehicles (EVs) has gained momentum in India, with significant demand and on-the-ground traction in recent years. The country’s need to combat rising air pollution levels and dependence on crude oil imports is driving the increase in EV demand.

India is one of the largest importers of fossil fuels globally, and according to the 2022 World Air Quality Report, the country ranks 8th on the list of worst air quality countries. As a result, EVs that reduce pollution levels and dependence on crude oil-based sources are becoming crucial for India’s transportation sector.

In response to India’s e-mobility initiatives for pollution-free transportation, several established automobile manufacturers and newcomers are beginning to manufacture EVs for the last mile connectivity and bulk short/long distance transportation segment. Startups also play a significant role in the evolving electric mobility sector, with charging infrastructure and mobility services offering potential business opportunities for digital technologies like charging location finders, reservation apps, online payments, and ride-sharing services.

India’s government has implemented various initiatives such as the National Electric Mobility Mission Plan 2020 (NEMMP), Production Linked Incentive (PLI) scheme, Vehicle Scrappage Policy, and National Mission on Transformative Mobility and Storage to support the EV transition.

NEMMP, under which the Faster Use and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) scheme was introduced, provides a vision and strategy for the country’s rapid adoption of EVs and their manufacturing. The government aims to make EVs 30% of new cars and two-wheelers sales by 2030. FAME was launched in two phases, with FAME II currently ongoing.

PLI is a supply-side incentive scheme that rewards local manufacturers based on incremental revenue. It offers foreign corporations a chance to open factories in India, while domestic businesses are encouraged to expand or open new factories. Electric vehicles are eligible under this scheme.

The Vehicle Scrappage Policy aims to reduce environmental pollution and noise by phasing out old, unsafe, and unreliable vehicles and increasing the deployment of new fuel-efficient vehicles.

The National Mission on Transformative Mobility and Storage focuses on developing and implementing transformational mobility strategies and the Phased Manufacturing Program for electric vehicles, components, and batteries to encourage local production throughout the EV supply chain.

India’s EV transition has significant investment potential, with several opportunities for startups to enter the market and technology development. The government’s policies and initiatives offer much-needed support to suppliers and manufacturers wanting to shift towards EVs in the country.

India is witnessing a significant increase in the adoption of electric vehicles and states are also rolling out dedicated policies to promote the transition to EVs. Nearly 50% of the states in India have already approved or notified their EV policies to meet the growing demand for electric means of transportation.

Among the states, Uttar Pradesh, Delhi and Karnataka have emerged as the top three in EV registrations, which is a clear indication of the growing interest and demand for electric vehicles.

Several startups have been instrumental in driving the adoption of electric vehicles in India. Companies like Ather Energy, Yulu, and Tork Motors are pioneers in the EV mobility space, and they have the support of venture capitalists and mentorship from industry experts. The emergence of such startups is a positive sign for India’s EV industry and shows that the country has a vibrant startup ecosystem.

Furthermore, the government is taking several measures to encourage the transition to the EV ecosystem. The battery swapping policy and the recognition of energy or battery as a service will ensure development in the EV infrastructure and bolster the adoption of EVs in public transportation.

In conclusion, the awareness regarding fuel and energy efficiency is increasing globally, and the Indian government is taking appropriate measures to promote and develop the EV infrastructure across the country. The state policies, benefits to startups, and government initiatives are contributing significantly to the growth of the EV market in India.

About the Author

Darshana Chauhan

Senior Associate | darshana.c@treelife.in

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