India's Automotive Landscape and the Push for Electric Mobility
India's automotive sector is a cornerstone of the nation's economy, contributing nearly 49% to its manufacturing GDP. The production of vehicles spans across categories, with approximately 49 lakh passenger vehicles, 214.7 lakh two-wheelers, and 9.9 lakh three-wheelers manufactured annually. However, the reliance on traditional internal combustion engines (ICE) is not without consequences. India faces dual crises of increasing air pollution and a growing dependence on expensive oil imports. The transportation sector is one of the primary contributors to India’s carbon emissions, responsible for nearly 40% of the total pollution. As urbanization accelerates, vehicle registrations surge by 17,000 annually, further worsening air quality. India, home to 22 of the world’s 30 most polluted cities, experiences a substantial health and environmental toll from vehicular emissions, including a rising prevalence of respiratory diseases.
In response, India is undergoing a transformational shift towards electric mobility, aligning with its broader climate and energy independence goals. Electric vehicles (EVs) are emerging as a solution to mitigate urban pollution, reduce greenhouse gas emissions, and decrease reliance on fossil fuels. The government has introduced initiatives like the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) schemes to accelerate this transition. These programs provide subsidies for EV purchases, reduce GST rates on EVs to 5% (compared to 28% for petrol cars), and support the development of charging infrastructure. Additionally, several states have introduced their own EV policies, offering road tax waivers and incentives to consumers and manufacturers alike.
This transition holds immense promise for India’s economic landscape. The EV industry has the potential to attract billions of dollars in investments, creating over one crore direct jobs and five crore indirect jobs by 2030. In 2021 alone, the industry secured $6 billion in private equity and venture capital, a figure expected to soar to $20 billion by 2030. As part of its long-term vision, India aims to establish a robust electric mobility framework by 2047. This ambitious target encompasses a comprehensive strategy to reduce vehicular emissions, cut down on fuel imports, and transition to a sustainable and resilient transportation system. However, the path to achieving this vision requires overcoming critical challenges in affordability, infrastructure, and consumer adoption.