Syllabus: Infrastructure: Energy, Ports, Roads, Airports, Railways etc.
Context
- India is the world’s third-largest automobile market, contributing nearly 7% to national GDP.
- The global shift towards clean and green mobility is accelerating India’s EV transition.
- In 2024, EVs accounted for 7.5% of total vehicle sales in India.
- Electric two-wheelers dominate, contributing nearly 60% of total EV sales.
- Government schemes like FAME and PLI, along with battery innovation, drive this shift.
Current Status of EV Adoption
- Overall Market Trends
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- EV penetration reached 7.5% in 2024–25, supported by incentives and awareness.
- India’s EV growth remains slower than global leaders, especially China.
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- Segment-wise Adoption
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- Electric two-wheelers lead adoption due to affordability and urban suitability.
- Public transport electrification is prioritised, with 14,000 e-buses planned by 2026.
- States such as Telangana and Karnataka are expanding electric bus fleets.
- Policy and Technology Drivers
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- FAME II (₹10,000 crore) significantly boosted EV uptake across segments.
- Focus on domestic battery manufacturing, particularly LFP batteries, to reduce imports.
- 2030 EV targets include 80% in two/three-wheelers, 40% buses, 30% private cars.
Challenges Hindering EV Adoption
- Economic Constraints
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- EVs remain 20–30% costlier than ICE vehicles, limiting affordability.
- Limited budget EV models compared to conventional vehicles.
- Infrastructure Deficit
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- India has only one public charger per 135 EVs, far below global averages.
- Achieving 3.9 million chargers by 2030 requires massive infrastructure expansion.
- Charging stations are capital-intensive and affected by grid reliability issues.
- Fragmented charging standards hinder seamless infrastructure deployment.
- Supply Chain and Policy Issues
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- Over 90% lithium-ion batteries are imported, exposing supply vulnerabilities.
- Frequent policy changes, including the shift from FAME II to PM e-DRIVE, create uncertainty.
- Consumer-Level Barriers
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- Range anxiety persists due to limited fast-charging availability.
- Low awareness, weak financing options and poor resale value deter buyers.
Government Measures to Promote EVs
- Major Schemes and Policies
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- PM e-DRIVE Scheme (₹10,900 crore, 2024–26) to strengthen EV ecosystem.
- ₹2,000 crore allocated for 72,000 charging stations nationwide.
- BHEL designated nodal agency; development of a unified EV super app.
- Over 7,000 public chargers sanctioned earlier under FAME II.
- Manufacturing and Fiscal Support
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- New EV Manufacturing Policy (2024) mandates ₹4,150 crore minimum investment.
- Target of 50% domestic value addition within five years.
- PLI for ACC batteries (₹18,100 crore) to localise battery production.
- GST reduced to 5% on EVs and charging equipment.
- Public Transport and State Initiatives
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- PM e-Bus Sewa Scheme targets deployment of 10,000 e-buses under PPP.
- States and UTs like Delhi, Telangana, Karnataka actively promote EV buses.
Way Forward for India’s EV Sector
- Technology and Infrastructure
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- Scale up domestic battery manufacturing and invest in advanced chemistries.
- Expand charging infrastructure, especially in rural and semi-urban regions.
- Promote interoperability, battery swapping and BaaS models.
- Policy and Financing Reforms
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- Ensure a stable, long-term EV policy framework across Centre and States.
- Use green bonds, concessional finance and PPPs for infrastructure expansion.
- Address GST disparities between EVs and raw materials.
- Market and Innovation Focus
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- Prioritise public transport, commercial fleets and last-mile delivery.
- Continue incentives for two- and three-wheelers, critical for mass adoption.
Conclusion
- India’s EV transition, supported by policy push, infrastructure expansion and domestic manufacturing, is central to sustainable mobility. Continued reforms can help achieve 2030 adoption targets, enhance energy security and support long-term climate commitments.
