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India is the fifth largest car market in the world and has the potential to become one of the top three in the near future — with about 40 crore customers in need of mobility solutions by the year 2030.

Need for Electric Vehicles

• India needs a transportation revolution. The current trajectory of adding ever more cars running on expensive imported fuel and cluttering up already overcrowded cities suffering from infrastructure bottlenecks and intense air pollution is unfeasible.
• India’s cities will choke. A transportation revolution will have many components — better “walkability”, public transportation, railways, roads — and better cars. Many of these “better cars” will likely be electric.

India’s Support for Electric Vehicles

• India is among a handful of countries that supports the global EV30@30 campaign, which aims for at least 30 per cent new vehicle sales to be electric by 2030.
• Prime Minister Narendra Modi’s advocacy of five elements for climate change — “Panchamrit” — at the recently concluded COP26 in Glasgow is a commitment to the same.
• The PM espoused various ideas, like renewable energy catering to 50 per cent of India’s energy needs, reducing carbon emission by 1 billion tonnes by 2030 and achieving net zero by 2070, so that future generations can lead secure and prosperous lives.
• The government of India has taken various measures to develop and promote the EV ecosystem in the country, ranging from the remodeled Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme (Rs 10,000 crore) for the consumer side to production-linked incentive (PLI) scheme for Advanced Chemistry Cell (ACC) ( Rs 18,100 crore) for the supplier side, and finally the recently launched PLI scheme for Auto and Automotive Components (Rs 25,938 crore) for manufacturers of electric vehicles.

Electric Mobility Revolution

• It is estimated that two in every hundred cars sold today are powered by electricity.
• This phenomenon is today defined by the rapid growth in EV uptake, with EV sales for the year 2020, reaching 2.1 million.
• The global EV fleet totalled 8.0 million in 2020 with EVs accounting for 1 per cent of the global vehicle stock and 2.6 per cent of global car sales.
• Falling battery costs and rising performance efficiencies are fueling the demand for EVs globally.

Challenges

• It is estimated that by 2020-30 India’s cumulative demand for batteries would be approximately 900-1100 GWh, but there is concern over the absence of a manufacturing base for batteries in India, leading to sole reliance on imports to meet rising demand.
• As per government data, India imported more than $1 billion worth of lithium-ion cells in 2021, even though there is negligible penetration of electric vehicles and battery storage in the power sector.
• India is technologically deficient in the production of electronics that form the backbone of the EV industry, such as batteries, semiconductors, controllers, etc. EVs have higher servicing costs which require higher levels of skills. India lacks dedicated training courses for such skill development.
• India does not have any known reserves of lithium and cobalt which are required for battery production. Dependence on other countries for the import of lithium-ion batteries is an obstacle in becoming completely self-reliant in the battery manufacturing sector.

Way Forward

• EVs will contribute to improving the overall energy security situation as the country imports over 80% of its overall crude oil requirements, amounting to approximately $100 billion.
• The push for EVs is also expected to play an important role in the local EV manufacturing industry for job creation. Additionally, through several grid support services, EVs are expected to strengthen the grid and help accommodate higher renewable energy penetration while maintaining secure and stable grid operation.