The goal of all-electric mobility by 2032 looks "very challenging" to achieve and there is a need for greater subsidy and government support to drive the segment, says an UBS report. "Despite rapidly falling battery costs, we expect a long- range electric vehicle (EV) to remain too expensive for mainstream adoption without major government subsidies," UBS said in a research note.The median car in India now costs only USD 10,000 (ex-showroom) while, even in 2025, UBS expects a long-range EV (380km) to cost about USD 21,500 and a moderate-range one (190 km) USD 16,000, given UBS's forecast of a USD 130/Kwh battery cost by 2025.
"We believe greater government investment will be needed to make EVs more attractive to consumers and manufacturers, but the government has limited fiscal space and other priorities, so larger incentives to use EVs seem unlikely," the report said. Power Minister Piyush Goyal in April had said that India is looking at having an all-electric car fleet by 2030 with an express objective of lowering the fuel import bill and running cost of vehicles.
UBS further added given its fiscal constraints, the government should offer more incentives to improve the viability of hybrid electric vehicles (HEV) and plug-in hybrid electric vehicles (PHEV) as they use smaller batteries, are not constrained by weak charging infrastructure, and the move should result in development of a supply chain that will eventually be a stepping stone to battery electric vehicles (BEV)," UBS said.
Though solar power generation should grow rapidly, UBS sees India's power-generation mix too coal-dependant to drive a reduction in emissions, even if EVs were widely adopted. According to a separate UBS Evidence Lab survey in 2016, top concerns about EVs were high cost, limited single charge range, limited charging infrastructure and battery life. "We believe these concerns are universal but are more acute in India given the low affordability and low price
points in the market," the report said.