India has a lot to gain from the widespread adoption of e-mobility. Under the Make In India programme, the manufacturing of e-vehicles and their associated components is expected to increase the share of manufacturing in India’s GDP to 25% by 2022. On the economic front, large-scale adoption of electric vehicles is projected to help save $60 billion on oil imports by 2030 - currently 82% of India’s oil demand is fulfilled by imports. Price of electricity as fuel could fall as low as Rs 1.1/km, helping an electric vehicle owner save up to Rs. 20,000 for every 5,000km traversed. Finally, electrification will help reduce vehicular emissions, a key contributor to air pollution which causes an average 3% GDP loss every year. All these points are enough to convince us about the importance of electric vehicles in India and the following steps can make it a reality.
The first step towards making electric vehicles practical is to make them affordable. China has become the largest deployer of electric vehicles in the world, buying more than 50% of the entire global production of e-vehicles. It has done so by providing heavy subsidies to users- retail and commercial. If India wants e- vehicles to be a mass product, it needs to provide attractive subsidies for their adoption by the people.
In order to make electric vehicle growth sustainable, India needs to replace imports with cheaper and efficient domestic spare parts for EVs so that the EV movement is a permanent one in the country. China does mining and refining of majority of the raw material used in battery manufacturing so that it can control the EV market. India needs to create its own supply chain and manufacture electric vehicle batteries at home efficiently so that it can a sustainable growth model can be created.
Foreign investment in EV market is still negligible in India. FDI in EV can expand the market exponentially in a very short time due to massive domestic consumer power. More supply of EV companies will eventually create its own demand.
RBI can make EV financing a part of Priority Sector Lending. Environment disaster is a reality for India. EV can resolve the issue by controlling vehicular pollution in Urban areas.
Electric vehicles are a revolution. India has no choice but to adopt it as fast as possible. The earlier we accept it, the faster we can grow sustainably