In recent years, the Electric Vehicle (EV) market in India has expanded significantly due to a combination of government policies, technological advances, and shifting consumer preferences. The Indian government has set a goal of 30 percent EV penetration by 2030, which has helped foster the growth of the electric vehicle market.
India has a huge potential market for EVs, with the world’s largest population and rapidly urbanizing cities. Rising incomes and a growing middle class have also led to increased demand for personal mobility, making EVs an attractive option for Indian consumers. Additionally, EVs can help reduce India’s dependence on fossil fuels, improve energy security, lower carbon emissions, and improve air quality, all of which are critical challenges facing the country today.
Tax incentives, subsidies, and investments in charging infrastructure are among the initiatives implemented by the Modi government to promote the growth of the EV market. In recent years, the Indian EV market has attracted a substantial amount of investment due to the favourable environment created by these initiatives. Indian companies are also investing in the research and development of electric vehicles, with a growing number of domestic competitors entering the market.
Without a doubt, the Indian EV market is poised for rapid growth in the coming years, and investors who enter the market early will reap the rewards of this growth. Across the value chain, including manufacturing, charging infrastructure, and battery technology, the market provides attractive investment opportunities. With government support, technological advancements, and increasing consumer interest, the Indian EV market is an attractive destination for investors seeking to participate in the sustainable transportation revolution. In the global transition towards sustainable transportation, the electric mobility market has emerged as a key player. In recent years, the market has expanded significantly due to a combination of government policies, technological advancements, and shifting consumer preferences.
Seven reasons why India’s electric mobility market is significant: 1-Huge market potential: India has the world’s largest population and is rapidly urbanizing. With rising incomes and a growing middle class, the demand for personal mobility is expected to increase exponentially. India has the world’s second-largest population and is rapidly urbanizing, which means that there is a large and growing market for transportation solutions. Furthermore, as incomes rise and the middle class grows, the demand for personal mobility is expected to increase exponentially. This presents an opportunity for companies that provide products and services related to personal mobility, such as automobiles, motorcycles, bicycles, and ride-sharing platforms.
2-Government support: The Modi government has been actively supporting the adoption of electric vehicles (EVs) in the country, recognizing the potential benefits of reducing dependence on fossil fuels and improving air quality.
India’s government has taken the following steps to promote the use of electric vehicles:
FAME India Scheme: The Faster Adoption and Manufacturing of Electric Vehicles (FAME) India scheme was launched in 2015 to provide incentives and subsidies for the adoption of EVs in the country. The scheme aims to support the development of a market for electric vehicles and their components, and to encourage the use of hybrid and electric vehicles in public transportation. GST Reduction: In 2019, the Goods and Services Tax (GST) on electric vehicles was reduced from 12% to 5%, making them more affordable for consumers.
Charging Infrastructure: The government has set a target to install 500,000 charging stations for EVs across the country by 2025, and is providing financial incentives to encourage their installation.
Tax Incentives: The government provides income tax deductions of up to Rs. 1.5 lakh on the interest paid on loans taken to purchase electric vehicles.
Exemptions: Electric vehicles are exempt from road tax and registration fees in some states in India.
Public Procurement: The government has also announced plans to replace its fleet of vehicles with electric vehicles, and has made it mandatory for all new government buildings to have EV charging facilities.
Overall, the Indian government’s support for electric vehicles has been significant, and has helped to create a conducive environment for the growth of the EV market in the country. These measures are expected to further accelerate the adoption of electric vehicles in India and contribute towards a cleaner and more sustainable transportation system. 3-Reduced dependence on fossil fuels: Electric mobility can help reduce India’s dependence on fossil fuels and improve the country’s energy security. This is especially important given the volatile nature of global oil prices.
4-Infrastructure development: The Indian government has set a target to install 500,000 charging stations for EVs across the country by 2025, which is expected to address one of the major concerns of consumers – range anxiety.
5-Growing focus on sustainability: There is a growing focus on sustainability and reducing carbon emissions across industries, which is driving the adoption of electric vehicles as a cleaner and more sustainable mode of transportation.
6-Competitive advantage: Investing in the electric vehicle market in India presents an opportunity to gain a competitive advantage in a rapidly growing market, and to establish a foothold in a region that is expected to become one of the world’s largest markets for EVs in the coming years.
7-Increasing consumer awareness: There is a growing awareness among Indian consumers about the benefits of electric vehicles, such as lower operating costs, reduced air pollution, and greater energy efficiency.
Eventually, the electric mobility market in India represents a tremendous opportunity for growth, innovation, and sustainability. Demand for electric vehicles is projected to increase exponentially in the coming years due to India’s large and rapidly urbanising population, rising incomes, and growing awareness of environmental issues. The Indian government has taken several steps to promote the adoption of electric vehicles, including providing incentives and subsidies, reducing taxes, and investing in charging infrastructure. This has created a conducive environment for private sector investments and innovation, leading to technological advancements in battery technology, charging infrastructure, smart mobility solutions, and indigenous production.
Investing in the electric vehicle market in India presents a number of convincing reasons, including enormous market potential, favourable government policies, rising consumer awareness, falling battery prices, infrastructure development, a growing emphasis on sustainability, and a competitive advantage. These factors make India an attractive destination for investors and businesses seeking to capitalise on the rising demand for electric vehicles and contribute to the development of a cleaner and more sustainable transportation system. Overall, India’s electric mobility market is significant not only for the economic opportunities it presents, but also for the positive impact it can have on the country’s environment, public health, and citizens’ quality of life.
The electric mobility market in India is poised for rapid expansion and has the potential to revolutionise the country’s transportation industry. With government support, technological advancements, and growing consumer interest, electric mobility is a crucial tool for creating a prosperous and sustainable future.
Ranjeet Mehta is Deputy Secretary General, PHDCCI, New Delhi.