Context

India, the world’s third-largest automobile market, is undergoing a structural transition towards electric mobility driven by climate commitments, energy security concerns, and technological advancements. The EV transition is now a central pillar of India’s sustainable transport and industrial policy framework.

Current Status of EV Adoption in India

Market Penetration

• EVs account for 7.5% of total vehicle sales (2024–25)
• Growth remains modest compared to global leaders like China, where over 50% of new cars are electric
• Adoption is uneven across vehicle segments

Segment-wise Trends

• Electric Two-Wheelers
  • Constitute nearly 60% of EV sales
  • Driven by affordability, urban suitability, and lower operating costs
• Public Transport
  • Strong push towards e-buses
  • Target of 14,000 e-buses by 2026
  • States like Telangana, Karnataka, Delhi leading deployment

Policy and Manufacturing Push

• FAME II and PLI schemes have catalysed demand and supply
• Domestic focus on Lithium Iron Phosphate (LFP) batteries
• India aims to reduce import dependence and enhance energy security

2030 Targets

• 80% EV penetration in two- and three-wheelers
• 40% in buses
• 30% in private cars

Key Challenges Hindering EV Adoption

High Upfront Costs

• EVs cost 20–30% more than ICE vehicles
• Limited affordable models restrict mass adoption
• Subsidies and GST reduction alone insufficient

Inadequate Charging Infrastructure

• 1 public charger per 135 EVs, far below global norms
• Estimated requirement: 3.9 million chargers by 2030
• High capital cost and grid reliability issues
• Fragmented charging standards across manufacturers

Import Dependence

• Over 90% of lithium-ion batteries imported
• Exposure to global supply chain disruptions
• Domestic manufacturing still at early stages

Policy and Regulatory Uncertainty

• Frequent shifts (FAME II → PM E-Drive)
• Import duty changes and tax ambiguities affect investor confidence

Range Anxiety and Battery Concerns

• Limited fast-charging options
• Battery degradation and resale value concerns

Low Awareness and Financing Barriers

• Poor consumer understanding of EV lifecycle benefits
• Limited financing products and weak secondary market

Government Measures to Promote EV Adoption

PM E-Drive Scheme

• Outlay: ₹10,900 crore (2024–26)
• Focus on green mobility and EV ecosystem development

Charging Infrastructure Expansion

• ₹2,000 crore allocated for 72,000 charging stations
• Strategic deployment across highways, cities, airports
• BHEL as nodal agency and development of a unified EV super app

Manufacturing and Investment Policies

• Electric Vehicle Manufacturing Policy (2024)
  • Minimum investment: ₹4,150 crore
  • 50% domestic value addition within 5 years
• SPMEPCI to attract global EV manufacturers

Battery Manufacturing Support

• PLI for Advanced Chemistry Cells (₹18,100 crore)
• Push for domestic battery ecosystem

Public Transport Initiatives

• PM e-Bus Sewa Scheme for 10,000 e-buses (PPP model)
• State-level EV bus programs integrated with central schemes

Fiscal Incentives

• GST reduced to 5% on EVs and charging equipment
• FAME II incentives for two-wheelers, three-wheelers, and buses

Way Forward

Strengthen Battery Ecosystem

• Scale domestic battery production
• Invest in solid-state and sodium-ion batteries
• Leverage National Critical Mineral Mission for lithium sourcing

Accelerate Charging Infrastructure

• Expand charging in rural and semi-urban areas
• Promote battery swapping and Battery-as-a-Service (BaaS)
• Standardise connectors and interoperability norms

Stable Policy Framework

• Harmonise central and state EV policies
• Resolve GST inversion between EV components and finished vehicles
• Streamline land acquisition for charging stations

Innovative Financing Models

• Use green bonds, low-interest loans, and PPPs
• Encourage private sector participation through risk-sharing mechanisms

Boost Research and Development

• Focus on battery efficiency, range, and charging speed
• Promote indigenous EV technology innovation
• Strengthen industry-academia collaboration

Global Collaboration

• Partner with EV leaders for technology transfer
• Secure lithium supply chains through strategic ties (e.g., Argentina)

Segment-Focused Strategy

• Prioritise electrification of buses, taxis, delivery fleets
• Continue incentives for two- and three-wheelers

Explore Hydrogen Mobility

• Integrate National Green Hydrogen Mission
• Promote hydrogen fuel cell vehicles for heavy transport

Conclusion

India’s EV transition is no longer experimental, it is structural and strategic. With strong policy backing, manufacturing incentives, and infrastructure investment, EVs can enhance energy security, reduce emissions, generate green jobs, and align India with global climate goals. The success of this transition will depend on policy stability, technological innovation, and coordinated public-private action.