The government wants India to be a 100% electric vehicle nation by 2030. According to the new government plan, all cars that will be sold in India from 2030 onwards will be electric. Due to the competitive market environment, the Indian automotive industry has become one of the biggest in the world. According to the Automotive Mission Plan Review Report 2016, the revenue of the automotive industry is equivalent to 7.1%. The Government of India approved the National Electric Mobility Mission in 2011 and then the National Electric Mobility Mission Plan (NEMMP) 2020 which was unveiled in 2013. The Ministry of Heavy Industry formulated a program called FAME – India ( Fastest Adoption & Manufacture of (Hybrid and Electric Vehicles in India) for implementation from 1 April 2015, which was therefore part of the mission, India’s National Mission for Electric Mobility and Faster Adoption and Manufacturing of Electric vehicles (EVs) appear to have received their long-awaited boost. Thanks to some major modifications established by the Ministry of Heavy Industry (DHI) in June 2021 to the FAME-II program, the dynamics of electric vehicles has made a remarkable recovery and gained momentum. , especially after the notable slowdown experienced due to the ongoing Covid19 Pandemic.
The global system is proposed to run for a period of 6 years, until 2020, in which it is expected to lead the development of the hybrid/electric vehicle market and its manufacturing ecosystem to achieve self-sufficiency in the end. period. The program has 4 areas of intervention, namely:
– Advertising –
Demand generation, charging infrastructure, technology development and pilot projects.
An electric car uses alternative fuel electricity instead of gasoline or diesel. There is a growing acceptance of hybrid and electric cars in the country and more and more manufacturers are opting for this niche segment with the explicit aim of reducing the fuel import bill and the cost of operating vehicles. Converting vehicles to electric vehicles can save fossil fuels worth around US$100 billion a year, avoiding dependence on imported petroleum products, which would save the country in valuable foreign currency and reduce pollution in cities by 80-90%. %.
The government’s ambition is for electric vehicle sales to account for 30% of private cars, 70% of commercial vehicles and 80% of two- and three-wheel vehicles by 2030, as there is an immediate need to decarbonise the transport sector. If electric vehicles reach 40% in the car and two-wheeler segments and almost 100% in buses by 2030, India could reduce its consumption of crude oil by 156 million tonnes, which is equivalent to Rs 3.5 lakh crore. .
The government introduced the second phase of the Faster Adoption and Manufacture of Hybrid and Electric Vehicles (FAME 2) scheme, with an expenditure of INR 10,000 Cr. It aims to give the necessary boost to electric vehicles to reduce the pollution that afflicts big cities and reduce oil imports. FAME has put a good number of electric buses, 2W, 3W and some BEV and light hybrid cars on Indian roads. In fiscal 2019, more than 750,000 electric vehicles were sold, with a total of 7,59,600 units, including electric passenger vehicles (3,600), electric three-wheelers (6,30,000) and electric two-wheelers (126K) .
By 2030, the government plans to have an electric vehicle sales penetration of 40% for buses, 30% for private cars, 70% for commercial vehicles, and 80% for two- and three-wheel vehicles. The Minister of Road Transport and Highways highlighted that NITI Aayog has inspired 25 states to develop electric vehicle policies, of which 15 have already announced state electric vehicle policies under the Mission on Electric Vehicles.
Arthur D Little’s study, Unleashing India’s Electric Mobility Potential, predicts that by 2030, more than 30% of vehicles in India will be electric. The study also highlights that by 2030, the electric vehicle industry will surpass 10 million vehicles with a 30% adoption rate across all categories. However, the study also points out that passenger cars will only represent 5% of total electric vehicle sales.
Releasing more details, the study suggests that by 2030, India will need around 800 GWh of batteries to achieve 30% adoption of electric vehicles. To achieve this, the country is accelerating plans to manufacture lithium-ion cells, anticipating more than $7.5 billion in investment potential and $2.3 billion in government subsidies.
The electric vehicle industry has invested US$6 billion in 2021 and could reach US$20 billion in 2030. A sign that the electric vehicle market appears to be attracting the attention of private equity/venture capital investors in India, this financing is expected to grow from US$181 million to US$1,718 million in the same period – annual financing rate of 849%. So far, this investment (PE/VC) has reached around US$666 million in 2022.
The opinions expressed above are those of the author.