Electric Vehicle Industry in India: Current Status, Government Policies, Future Outlook – EQ Mag Pro
The scope of the electric vehicle market is multifaceted, encompassing a wide range of stakeholders. For an automotive market that is the fifth largest in the world and expected to be the third largest, this requires widespread and rapid EV adoption.
Thus over 3,30,000 EV units were sold in 2021, registering a growth of 168 per cent as compared to 2020. A report by IVCA-EY-IndusLaw suggests that this number will cross the 90 lakh mark by 2027. However, so far this boom in sales is led by two wheelers and three wheelers.
Therefore, there are many variables before the EV ecosystem in India becomes healthy. Currently, electric passenger cars and electric buses make up a small proportion of EV registrations. Also, there is the task of equipping the country with viable charging infrastructure. What is the dynamics of the electric vehicle market in India and the government’s thrust in the sector in the near future? the current state.
Of the 168 per cent growth in sales recorded in 2021, 48 per cent were from two-wheelers, 47 per cent from three-wheelers, followed by passenger vehicles at 4 per cent and electric buses with a marginal increase of 0.36 per cent. IVCA-EY-IndusLaw states that the boom in EV sales The need for personal mobility is supported by factors such as the rise in petrol and diesel prices.
Most of the EVs were sold in India’s most populous state Uttar Pradesh Which accounts for 20 percent of EV registrations in India. “As of CY21, electric vehicles accounted for 1.1 percent of total vehicle sales and are expected to grow at a CAGR of ~68 percent over the next 5 years to 39 percent of total automotive sales by CY27,” the report said.
The report said that at present, there are only 1,742 charging stations in the country and this number is expected to increase to 100,000 units by 2027 to meet the demand of 1.4 million electric vehicles, which are expected to ply on Indian roads by then. Have an estimate investments and funds.
The impending growth in the EV industry is already attracting substantial investment. In 2021, there was an investment of some $6 billion in the industry and this number is expected to increase to $20 billion by 2030. One of the dimensions of the EV ecosystem is finance and investment, allowing stakeholders to capitalize on this growth.
Private equity (PE) and venture capitalist (VC) investors have also increased their exposure to the industry. These investments grew from $181 million to $1.718 billion, registering an annual growth rate of 849 percent (time frame not indicated).
There are now also many mutual funds to invest directly in the industry. These are open-ended funds investing in companies involved in the development of EVs, related technology, components and materials. For example, the Mirae Asset Global Electric and Autonomous Vehicles ETF Fund of Funds, which includes investment opportunities in schemes such as lithium and battery technology, and electric and autonomous vehicles.
Ishpreet Singh Gandhi says, “The acceptance of finite energy options clearly indicates that innovative companies that unlock sustainable long-term energy solutions such as EVs, solar and alternative energy will achieve better business returns and are able to tap the long-term potential of the sector. are also equipped for , co-founder Stride Ventures and Stride One.
“Sustainability as an investment opportunity, especially clean energy, is on the verge of becoming one of the capital generating long-term assets like gold, real estate and equities, which are giving great returns in the long run. ”
The EV industry in India can create around 10 million or 1 crore direct jobs and 50 million or 5 crore indirect jobs by 2030. Ministry of Skill Development and entrepreneurship.
According to a study by CEEW-CEF, if steady progress is maintained in India, the EV market will be a $206 billion opportunity by 2030. This will require a cumulative investment of $180 billion in EV production and charging infrastructure. This points to a huge task for which government intervention is beyond necessary.
Driven by its ambition to make a major shift to electric vehicles by 2030, the government reiterated its commitment to the Paris Agreement. There are two strategies aimed at buyers and manufacturers in India, whereby the government offers buyers $1.4 billion in subsidies and increases import duties to boost domestic manufacturing. The main focus of the government is on electrification of public transport, as subsidies are mainly for two wheelers, three wheelers and buses. The government has also earmarked $140 million for the development of charging infrastructure.
Energy Efficiency Services Limited (EESL) is procuring 10,000 EVs from manufacturers for distribution to government departments on rental model and advance sale. EESL’s tender for 10,000 EVs aims to reduce the upfront cost of EVs to a great extent.
Other policies for EV adoption include the National Electric Mobility Mission Plan 2020 (NEMMP), which was launched in 2012 with the aim of improving national fuel security through the promotion of EVs and hybrids. In addition, the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme provides incentives for the purchase of electric vehicles. The second phase of the scheme, launched in 2019, offers incentives ranging from Rs 1,800 to Rs 29,000 on electric two-wheelers and up to Rs 1.38 lakh for cars.
India launched the e-nectar portal at the COP26 summit in Glasgow earlier this year. The portal aims to act as a one-stop destination for all information on EVs, such as charging facility location and EV financing options as well as information on investment opportunities, government policies and available subsidies. Similarly, there will also be an EV Super app which will act as a mobile phone solution for all the details of charging and tariff etc. near-term outlook
Under the above plans, 1,576 charging stations worth $66.63 million for 6,315 electric buses, 2,877 EV charging stations in 68 cities across 25 states/UTs and $14.39 million on nine expressways and 16 highways have been approved.
In May 2021, the government announced a production-linked scheme (PLI) for ACC Battery Storage Manufacturing Aimed at domestic manufacturing of EV batteries. The PLI scheme was also approved for the automobile and drone industry in September 2021. It aims to reduce dependence on imports and lower costs.
India now has a large number of EV startups, but it is the mainstream players that consumers are eyeing. TVS Motor Company and Bajaj Auto have already launched their electric scooters, with the likes of Hero MotoCorp and Suzuki set to launch one as well. Apart from these, startups like Ather Energy have grown to the level where they enjoy the trust and following of customers. In Electric Passenger Vehicle Sales, Tata Motors is currently leading with choice Nexon EVMahindra unveiled five new electric SUVs this month, luxury carmakers like Mercedes-Benz, Audi, Porsche all have their EVs in their lineup in India. The bottom line is that the industry has immense potential that will benefit a wide range of stakeholders. As industry can undertake energy production and storage, battery pack manufacturing and mineral procurement, change in electrics is inevitable, it’s just a matter of how soon it is.
Source: PTI
