Despite being the third-largest auto market and several incentives dished out by New Delhi and state governments, India remains a laggard in electric vehicles (EV). The country is a ripe target for EV makers but is slow to catch up with other markets, according to a recent report by S&P Global Ratings. Domestic sales of EVs have more than doubled, but they barely represent 2% of the total light-vehicle sales in the last 12 months. A couple of domestic auto majors have lined up plans for EV launches, but India has yet to make its presence felt in the international market with powerful EVs. On the other hand, we are also lagging in related segments such as battery manufacturing and charging infrastructure.
New Delhi has reiterated its support for the sector and proposed several reforms to enhance the market penetration of EVs in the country. Schemes such as the FAME India (Faster Adoption and Manufacturing of EVs) initiative, tax reduction, and production-linked incentives aim to roll out the red carpet for the EV industry. Launched in 2015 by the Centre, the FAME India initiative was meant to reduce the usage of gasoline and diesel automobiles. It also aims to incentivise e-vehicles.
Maharashtra was among the first to unveil a comprehensive EV Policy in 2021, which was primarily aimed at accelerating the adoption of EVs and setting up manufacturing and charging infrastructure in the state. Its target for EVs to contribute 10% of new vehicle registrations by 2025 looks far-fetched. This is despite Maharashtra accounting for a one-third share of four-wheeler EV sales and 17% of electric two-wheelers sold in India. Early this week, the Tamil Nadu power generation and distribution arm announced a 50% reduction in energy charges (from Rs 12 to Rs 6 per unit) for EV charging stations, effective from July 1. It has also dropped fixed charges from Rs 300 to Rs 75.
For sustainable transportation, especially in cities, EVs will be the best option. But the fact is buyers are yet to switch over to EVs, despite the high oil prices. E-vehicles’ high price tags and the yet-to-be-established charging infrastructure network act as deterrents. The development of adequate charging infrastructure will be vital to EV adoption. Fleet aggregators should also be encouraged to operate EVs across India. But right now, it is time to pause and do a reality check on our transition so far.