Following a strong governmental push towards adoption of electric vehicles (EVs), India has the potential to become one of the largest EV markets, said a report on Thursday by World Economic Forum, Organisation for Public-Private Cooperation and the Ola Mobility Institute (OMI). The central government with other states has been vigorously promoting EVs to cut down the import of crude oil and reduce vehicular pollution. The government is also incentivizing EV manufacturers to increase the production of EVs.
Ten states and union territories (UTs) are building momentum for EV usage across three areas: manufacturing, infrastructure and services sectors. Given India’s role as part of the global big four automotive players (among US, China, Japan), large scale changes to the Indian market would impact the industry’s global footprint, the study observed.
“With many more states in the process of designing their EV policies, policy makers, businesses, and practitioners alike can use this framework to analyse state policies for sustainability and longevity,” said Christoph Wolff, head of mobility, World Economic Forum (WEF). “The role of government is crucial for accelerating adoption. Right now, the uptake of EVs is slow due to the high-upfront cost and range anxiety. But, long-term investment in research and development will create sustained growth,” it said.
“India has taken up an ambitious target to become a $5 trillion economy by 2025,” said Anand Shah, head, OMI. “The country has placed equal importance on growth that is environmentally sustainable. Mobility holds significant promise for India to enable low-carbon solutions. OMI with WEF intends for this framework to support the country’s readiness to go electric.”
While the approaches vary amongst these states and UTs, the report highlights three emerging trends. The first is that most states aspire to be manufacturing hubs for EV and EV components. Production of clean-fuel batteries, recycling and storage are incentivised across the board. For example, Uttar Pradesh and Maharashtra EV policies emphasise heavily on promoting EV manufacturing.
The second trend, infrastructure development, was largely a response to anxiety around the range of EVs, that is most states have provisions for installations of charging infrastructure in public and private places. Uttar Pradesh is targeting two lakh charging stations by 2024. Andhra Pradesh is targeting 100 per cent electrification of buses by 2029.
The third one is an emphasis on services the EV value chain can provide via public awareness. These include skilling programmes in Tamil Nadu, fiscal incentives in Maharashtra and non-fiscal incentives services in Telangana.
Many barriers prevent adoption of EVs
The uptake of EVs is slow as they are costly – not only upfront but also on a life-cycle cost basis. Further, two-wheeler EVs are priced much higher than their petrol-powered counterparts.