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Ishika Gupta

How sustainable is EV in the Indian context?


The Indian automotive industry has been growing rapidly over the past few decades and is presently the third largest in the world, surpassing automobile giants like Japan and Germany. With a rising population and increasing urbanisation, the demand for personal transportation has been on the rise, leading to an increase in pollution levels and a decrease in air quality. Estimates reveal that in 2022 alone, the transport sector was responsible for about 375 million tons of direct CO2 emissions. Other issues associated with traditional transportation include risings energy costs, concerns over climate change and the fast depletion of fossil fuels operating these vehicles. In this context, Electric Vehicles (EVs) have emerged as a potential solution to these problems, with the Indian government setting ambitious targets for the adoption of EVs in the country.


Electric Vehicles offer various benefits like fuel savings, improvement in air quality, lower maintenance costs and reduced noise pollution. With the goal of reducing the country’s carbon footprint and promoting sustainable transportation, the central government introduced the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) scheme in India. Under this scheme, the government has been taking various steps to promote the adoption of EVs, such as providing incentives for EV manufacturers and buyers through tax exemptions and subsidies, promoting research and development of EV technologies, and developing the necessary infrastructure for charging stations across the country. Through FAME, India aims to achieve a proportion of 30% EV penetration in the Indian automobile sector by 2030.


Despite these efforts, the shift from traditional ICE vehicles to EVs remains slow. One of the biggest problems facing the EV industry is the high cost and limited availability of EV models compared to traditional petrol and diesel-powered vehicles. This is due to the high cost of batteries and other components required for EVs, often imported from other countries. This makes EVs unaffordable for many people in India, especially families from the low and middle income strata, where the average disposable income spent on luxuries is less, to begin with.


Another obstacle facing the EV industry in India is the lack of infrastructure for charging stations. While the government has announced plans to install over 1 lakh charging stations across the country, the process is slow and will take time to develop. This lack of infrastructure makes it difficult for people to charge their EVs while on the go and is a major barrier to the widespread adoption of EVs. Additional challenges include a lack of consumer confidence in the safety and reliability of these vehicles, dependence on coal for producing electricity to meet the growing demand and lack of a robust retail lending mechanism for consumers interested in buying EVs through credit.


However, despite these challenges, there are several factors which suggest that the EV industry in India is sustainable in the long run. First, India imports nearly 80% of its crude oil requirements. With global oil and gas prices witnessing a steady rise, EVs pose an attractive alternative. Moreover, India has abundant renewable energy resources, such as solar and wind power, which can be harnessed to power EVs. This could help reduce the carbon footprint of the transportation sector and promote sustainable energy use. Second, the government's commitment to promoting the adoption of EVs is strong, with various policies and initiatives being implemented to encourage the growth of the industry. Third, there is a growing awareness among consumers about the need for sustainable transportation and the benefits of EVs. As more people become aware of the environmental benefits of EVs, there is likely to be an increase in demand for these vehicles, which will help drive down costs and make them more affordable for the masses. All these factors play strongly in the favour of the potential widespread proliferation of electric mobility throughout the country. The Indian electric vehicle market was valued at USD 1.45 billion in 2021 and is expected to grow from USD 3.21 billion in 2022 to around USD 114 billion by 2029, exhibiting a CAGR of 66.52% during the forecast period.






In conclusion, while the EV industry in India still faces several challenges, there are several factors that suggest that it is sustainable in the long run. The government's commitment to promoting the adoption of EVs, the abundance of renewable energy resources, and the growing awareness among consumers about the benefits of EVs all point towards a brighter future for the industry in India. With India’s G20 presidency in 2023 and a strengthened commitment towards adopting sustainable practices, the EV industry stands at a golden precipice to flourish and solidify its position as a sustainable player in the Indian automotive market going forward.










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