India: Electric Mobility In India

FOREWORD

The fight to protect the planet from the effects of climate change would not be impactful without the transition of the automotive industry to green electric vehicles. The Indian Government's focus on decarbonizing its automobile sector has been at the core of the growth of electric vehicle industry. The past few years have been an exciting time in the Indian electric vehicle industry. Market analysis shows that in the year 2022 alone the electric vehicle market in India grew by almost 223% with the addition of approximately 48,000 new electric vehicles. With favourable policies and incentives this figure is expected to grow further in the coming years.

The Indian Government's support to the EV 30@30 campaign could be the much-needed catalyst to the EV industry. In addition to new electric vehicle manufacturing companies, we also see traditional vehicle manufacturers foray into the electric vehicle space, thereby increasing the competition in the market to offer technologically superior options to customers at more compelling prices. The Indian customer also has begun to focus on being more environmentally conscious and are looking for alternates to traditional combustion engine vehicles in newer technologies like electric vehicles, hybrid vehicles and green hydrogen vehicles.

Coupled with this growth in electric vehicles, the development of charging infrastructure is the need of the hour. The efficient implementation of electric vehicle charging infrastructure is crucial to meet the demands occasioned by the growth of electric vehicles. There is also a need to customize the policies and incentives of the government to the unique requirements of the Indian urban and rural markets, so as to further enable a rise in the adoption of electric vehicles across various markets in India.

We expect, with continued efforts on the part of the Government at both union and state levels and all the stakeholders in the e-mobility industry, penetration of electric vehicles will be at par with, and eventually replace, internal combustion engines on the Indian roads. In time, this will also help India realise its goal to reach net zero carbon emission by 2070.

We thank the Confederation of Indian Industry for their support in preparation of this report. We thank all our readers for supporting our attempt to summarize the nuances of the electric vehicle industry through this report.

MESSAGE FROM CII CHAIRMAN

Electric vehicles are the epitome of innovation and sustainability. They represent a paradigm shift in the automotive industry thus, offering a sustainable and efficient alternative to traditional internal combustion engines, reducing emissions, and promoting a cleaner environment. With advanced technology and sophisticated design, electric vehicles provide a seamless driving experience while demonstrating a commitment to a greener future.

Delhi's leadership in the electric vehicle (EV) sector is a shining example of India's commitment to sustainable and green transportation. With the Delhi EV Policy and other initiatives, the city has established itself as a leader in the EV industry, promoting clean transportation and driving the developmental change needed to realise a sustainable future.

Delhi is indeed, the first state in the country to come up with a step-by-step guide to help employers adopt workplace charging of EVs. The Delhi policy aims to improve air quality and establish a comprehensive EV ecosystem in the city. Moreover, Delhi has also become the first state in India to incentivize e-cycles, further promoting clean transportation.

The Confederation of Indian Industry (CII) in Delhi is at the forefront of driving the electric vehicle (EV) revolution in India. Working closely with the Delhi Government, CII Delhi has provided crucial policy recommendations for the adoption of EVs. CII Delhi is also actively generating awareness on the benefits of EVs, hosting insightful workshops, conferences and conducting surveys. With a steadfast commitment to the EV industry, CII Delhi is driving the developmental change serving as a catalyst for the EV industry's success in India. As the EV revolution continues to grow in India, Delhi's efforts will serve as a catalyst for other states to follow, creating a comprehensive and sustainable ecosystem for EVs across the country.

With the continued support of the government, industry, and society, India can realise its vision of a green and sustainable future powered by electric vehicles.

ELECTRIC MOBILITY IN INDIA

1. INTRODUCTION

India is heavily reliant on various forms of fossil fuels to operate its industries, power plants and vehicles.¹ In addition to the pollution caused by the use of fossil fuels, these non-renewable energy sources are being continuously depleted with the increase in population and rapid industrialisation. Given the challenges and consequences of such depletion and the growing concerns of climate change, India is aggressively looking at adoption of other eco-friendly alternatives for energy.

Transportation is a significant contributor to total emissions, and therefore the poor air quality of various cities and states in India.² There has been a rapid increase in the production and use of automobiles every year. For emerging economies like India, where accelerating economic expansion is driving the need for transportation, the urgency to discover viable sustainable mobility alternatives is also amplified.

To reduce the dependability on non-renewable fuels, Electric Vehicles ("EVs") are currently seen as the future of sustainability as well as the harbinger of green and clean mobility.

India's e-mobility initiatives for pollution-free commercial and private transportation have prompted many established vehicle manufacturers and new entrants to begin manufacturing of EVs in the last mile connectivity and bulk short/long distance transportation space, especially in the 2-wheeler ("E2W") and 3-wheeler ("E3W") segments. It is estimated that the total number of EVs registered in 2022 was 10,00,000 (ten lakh i.e., one million) units, whereas the number stood at 3,20,000 (three lakh twenty thousand i.e., three hundred and twenty thousand) units in 2021 which is approximately a 300% (three hundred percent) jump in just a year.

As per the statistics published by the International Energy Agency, a Paris-based autonomous intergovernmental organization, while the Covid-19 pandemic witnessed a drop in global car sales by 16% (sixteen percent), the registration of EVs grew by almost 41% (forty one percent) in 2020.3 A report published by the Indian Energy Storage Alliance, a leading industry alliance focused on the development of advanced energy storage, green hydrogen, and e-mobility technologies in India, projects that the Indian EV market will grow at a compound annual growth rate ("CAGR") of 36% (thirty six percent) till 2026. The EV battery market is also projected to grow at a CAGR of 30% (thirty percent) during the same period.⁴

The consistent and ongoing efforts of the Government of India ("Union Government") to incentivize both the demand and supply side for EVs and familiarize citizens with the merits of adopting EVs has been a major contributor to the growth and popularity of EVs in India. To illustrate, the Union Government has encouraged the use of EVs by providing tax exemptions and consumer subsidies as well as funding the construction of charging infrastructure.

Along with the Union Government's efforts, technological developments, advancements in battery technology and the developing charging infrastructure have further boosted the penetration of EV in the automobile consumer industry. In this Report, we will discuss the EV landscape of India. On the governance side, we aim to summarize the steps taken by the Union Government to ensure the widespread use of EVs and their adoption. The Report also deals with the specific spheres of charging infrastructure and battery ecosystem, which serve as an important aspect of the e-mobility domain in India. We will also compare and analyse the disparities between the Indian EV market with other competitive Asian markets, to draw inspiration for the developing EV sector in India. Lastly, the Report aims to analyse the potential hurdles in India's attempt to adopt EVs, and other emerging trends and updates in this industry.

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Footnotes

1. 57.4% of India's power comes from fossil fuel. Data as available at Ministry of Power, Government of India "Power sector at a glance", March 2023 (accessed from https://powermin.gov.in/en/content/power-sector-glance-all-india).

2. International Council on Clean Transportation, "Decarbonizing India's Road Transport: A Meta-Analysis of Road Transport Emissions Models", May 2022 (accessed from https://theicct.org/wp-content/uploads/2022/05/Meta-study-India-transport_final.pdf).

3. International Energy Agency, "How global electric cars sales defied Covid-19 in 2020", January 2021 (accessed from https://www.iea.org/commentaries/how-global-electric-car-sales-defied-covid-19-in-2020).

4. India Energy Storage Alliance, "India's EV market to grow at CAGR of 36% till 2026", December 2019 (accessed from https://indiaesa.info/images/pdf/press_release/Press_release-_India_EV_report_2019._758346379.pdf).

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