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Driving Towards a ‘green’ Future, Together – Government, Consumers, and Manufacturers Collaborate for EV Adoption in India

Published: April 17, 2023
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The Green Revolution in the 1960s was a significant event that shaped the destiny of millions of Indians through technology and innovation. A natural shapeshifter, technology is rewriting the history again. It is causing a similar disruptive revolution in the mobility sector. The current green mobility revolution has the potential to transform transportation and mitigate the impacts of climate change by reducing dependence on fossil fuels.

Aakash Minda, Executive Director, Minda Corporation Limited

India is currently experiencing significant changes in its mobility landscape as it strives to become a leader in climate change mitigation efforts. As one of the worlds fastest-growing economies, the country is committed to addressing the challenges posed by climate change and rapid urbanization by transitioning towards sustainable mobility.

We were ranked as one of the high performing countries for our climate change performance during the COP27 conference held last year. This commitment to shaping a sustainable future is evident through the favourable policy environment, incentives, and mobilized stakeholders driving the adoption of electric vehicles (EVs) in the country. India has the potential to become a global green mobility hub and is working towards faster adoption and transition.

However, there is still a long way to go, and it is necessary for OEMs, auto component manufacturers, and consumers to collaborate and accelerate the adoption of EVs to make this transition successful.

There are several factors that will facilitate the transition towards sustainable mobility in India. Let us take a look.

Government Initiatives Boosting EV Adoption

Multiple initiatives undertaken by the government and push to boost adoption across multi-layered mobility ecosystem is laudable.

The framework to strengthen the entire ecosystem is robust. Promotion of growing charging infrastructure, $10 billion-dollar Production-Linked Incentive (PLI) scheme encouraging semiconductors and display manufacturing in the country promoting self-reliance and indigenous manufacturing; Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME-II) scheme with a budget of INR 10,000 crore to promote EVs are a few examples which underline the sharp focus. These efforts are likely to result in a significant reduction in vehicular pollution and carbon emissions in the long run.

Besides EVs, the government is also investing in the development of smart cities with integrated public transportation systems. The National Biofuel Policy launched in 2018 promotes the use of biofuels to reduce the dependence on fossil fuels. The government has also announced Bharat Stage VI (BS VI) emission norms to reduce vehicle emissions.

The Green National Highway Corridors Project (GNHCP) in an aggregate length of 781 km to be implemented in the states of Himachal Pradesh, Rajasthan, Uttar Pradesh and Andhra Pradesh with financial assistance of World Bank is another noteworthy initiative that underscores our focus on sustainable mobility. The objective of the GNHCP is to demonstrate green and safe highways keeping in view climate resilience and the use of green technologies

This is an exemplary snapshot of Indian government’s multipronged approach to promote sustainable mobility by addressing various aspects such as technology, infrastructure, and policy.

The efforts are both holistic and commendable.

Evolved New Age Consumer

A recent report by Bain & Company, APAC markets care about the environment as much as western markets, thanks to the new age, dynamic and environment-conscious consumers. In India, 43% of consumers rank sustainability as a top-five key purchasing criteria and 62% Indian consumers are willing to spend a clear premium on sustainability products. Nearly 52% of consumers plan to increase their spending on sustainable products over the next three years.

Clearly, the tipping point is fast approaching. India is at an interesting juncture with a sensitised, heterogenous set of consumers who are the driving force behind moulding and adapting to new age consumption patterns. They are committing to sustainability, making informed choices. Sustainability has left a clear, lasting imprint.

This changing mindset is bound to have a ripple effect when it comes to preferred modes of mobility and choice of vehicle which is environment friendly.

OEMs and Start-Ups: The Real Gamechangers

India became the third largest automobile market, surpassing Japan and Germany in terms of sales.

According to the latest retail stats from Federation of Automobile Dealers Association (FADA), in the month of February, e-2W sales hit 65702 units nearly double the figure reported same time during last year.

e-3W sales hit 35667 units, up 87% year-on-year as compared to 19100 units sold in Feb 2022

In electric passenger vehicles category, February 2023 sales were up by 86% at 4560 units.

This upsurge is encouraging. It is evident that both consumers and manufacturers are increasingly adopting EV technology and there is healthy competition in the category. This trend is expected to grow with awareness of the environmental benefits and the governments initiatives to promote the adoption.

The efforts of Indian OEMs to adopt more sustainable manufacturing practices are critical. Faster transition to electric, hybrid, and CNG vehicles will help with faster adoption. The reduction of environmental impact however depends not just on the end product but by making the entire manufacturing process sustainable, reducing the environmental impact.

Auto component players: Powerful ‘allies’ to sustainable mobility

The responsibility to drive Indias net-zero targets is collective, and the agility of players across the spectrum is crucial to achieving this goal.

The overall Indian auto components industry which accounts for 2.3% of Indias GDP currently, is set to become the 3rd largest globally by 2025. The $46 Bn (FY21) Auto Components industry in India is expected to grow to $200 Bn by 2026.

Massive growth is on the horizon.

The auto component manufacturers play a critical role in Indias transition towards low-carbon strategies. As major stakeholders in the automotive industry, they have the potential to significantly influence the overall sustainability driven by the sector.

By developing and producing low-carbon technologies, adopting sustainable manufacturing practices, and promoting innovation through research and development, auto component manufacturers are already taking steps towards sustainability. Additionally, by investing in renewable energy and collaborating with national and global organizations, they can ensure that their products are best suited for electric and hybrid vehicles, thereby encouraging their adoption.

It is essential that these companies continue to focus on sustainable practices and the development of low-carbon technologies. This will not only help India achieve its net-zero targets but also contribute to building a sustainable and resilient future for the country.

Looking at truly ‘green’ future: Collaboration is Key!

The automotive sector in India is gearing towards ‘sustainable mobility‘ faster than we anticipated.

India’s electric Vehicles market is likely to cross one crore units annual sales by 2030, stated the Economic Survey 2022-23. It also said that EV market will create five crore direct and indirect jobs. This represents a significant increase in the adoption of EVs in the country.

Furthermore, the survey estimates that the domestic EV market is expected to grow at a compounded annual growth rate of 49% between 2022 and 2030.

This is just the beginning.

The EV market in India is poised for substantial growth over the next few years. The Indian government has implemented several policies and initiatives to promote the adoption of EVs, including tax incentives and subsidies, in an effort to reduce the countrys dependence on fossil fuels and combat air pollution. It is now up to the industry to take responsibility and work towards realizing the larger vision of promoting green mobility in the country.

We need to believe “together, we can” achieve the transition to green mobility in India. This will require a collective effort, with each cog moving at the same pace to ensure a smooth rollout and desired outcomes.

With the right approach, India can become a shining example of sustainable mobility for the rest of the world to follow.

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