Shifting Gears: The Evolving Electric Vehicle landscape in India

The government of India has recognized this size and promise, and has, therefore, set an industry mandate to push all manufacturers to switch to producing and selling all two-wheelers as electric vehicles by 2030.

Shifting Gears: The Evolving Electric Vehicle landscape in India

By Nakul Jaidka

The genesis of EVs in India began in 1996 when a Lucknow-based company developed the first electric three-wheeler. This was followed by a bunch of other ace automobile brands that launched a series of electric scooters/bikes between 2000 and 2007. Between 2005-2015, most EV companies sold out leading to a period of lull in the industry.

Then in 2015, there were signs of a slow yet sure EV induction among Indian consumers, starting with E-rikshaws, especially in the NCR region. With government support, more than five lac E-rickshaws were sold in 2016-17 spreading the popularity of E-rickshaws to Punjab, UP, West Bengal, Bihar and Haryana. The adoption rate of E-rickshaws was a huge surprise to everyone with massive sales with each passing year. 

Post-2015, was when India truly started to embark upon the journey towards the EV revolution. Although initially, Indian consumers were slow at adopting electric two-wheelers, the pace picked up and today, India has the world’s largest and fastest-growing two-wheeler market. It is the cheapest and quickest form of local travel for Indians and forecasts peg the number of vehicles sold annually to reach 26.6 million units by 2025, leading to a massive 78% sales growth by 2030. The thought and prospects of a large market like this one, going electric, sure sounds promising.

The government of India has recognized this size and promise, and has, therefore, set an industry mandate to push all manufacturers to switch to producing and selling all two-wheelers as electric vehicles by 2030. With the introduction of the FAME 1 & FAME-II schemes by the Govt., the enhancement of e-charging infrastructure, reduction of Goods & Services Tax (GST) on EV purchases as well as, and offering Rs. 10,000 crores worth of subsidies have given EVs a huge boost. These schemes alongside the Production Linked Incentive (PLI) schemes, scrappage policy as well as the Make in India initiative set up the roadmap for widespread EV manufacturing and adoption.

Today, the EV revolution in India is being led by two and three-wheelers. Given that petrol and diesel costs have skyrocketed over the past few years, many last-mile delivery companies are adopting EVs as their commercial vehicle. Fleet aggregators have emerged as powerful players in the EV sector spearheading hundreds of cargo fleets for last-mile delivery. Many states and cities in India have already switched over to E-buses for public transport.

The EESL has floated the world’s largest electric vehicle procurement tender of 10,000 vehicles to be manufactured for government employees. Adding to the FAME II subsidy scheme of the central government, the Delhi government also has joined the EV bandwagon by offering aggressive policies and incentivising EV owners. 

In April 2022, Niti Aayog released a draft policy on battery swapping for two- and three-wheelers. This policy helps reduce battery costs and promotes affordability, thereby, encouraging more consumers to switch to EVs. And while we say two-wheelers and three-wheelers are leading the EV revolution in India, one main factor to consider in their complete success would be to focus on consumer safety. This has been a concern recently, due to certain battery fire mishaps. Keeping up with India’s extreme temperatures of heat and monsoons and a high vehicular population, efforts are being made toward building an efficient Battery Management System (BMS).

New battery standards – AIS 156 and AIS-038 (rev 2) – are being introduced to ensure safety. While the government is working on building extensive charging infrastructure, many companies have already started to establish charging stations. Meanwhile, a well-known mining giant in India has collaborated with an MNC to invest Rs 1,54,000 crore to set up a semiconductor manufacturing facility in Gujarat while some brands are soon commencing India-specific battery-cell manufacturing. 

All in all, the evolution of EVs in India has been optimistic and one from which we have learnt many a lesson. With a strong push by the government and with the growing excitement towards EVs from the private sector, as well as consumers, we will soon see India reach its target of having 30% private, 70% commercial and 80% two-wheelers on the road by 2030. If we achieve this target by 2030, our path to becoming an EV Superpower will truly stand electrified. 

The author is the Founder & CEO, Stella Moto .

Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited).

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First published on: 27-11-2022 at 02:40:48 pm