Mission EV adoption: Catalysing India’s EV moonshot

Over the last few years, civil society and Central and State governments have taken a plethora of measures to boost EV adoption including the provisioning of generous purchase and scrappage incentives, facilitating awareness campaigns, encouraging domestic battery production, etc. These measures, while successful, need an overarching paradigm to unify and unite all entities to supercharge India’s electrification endeavour. All stakeholders need a north star to look up to and seamlessly travel with others in that direction.

India can do this by charting a grand vision in the form of an ambitious EV adoption target. It will send out clear and unambiguous signals to all entities involved to prepare for the oncoming long gestational, seismic shift in the form of the electric revolution. OEMs, component manufacturers, and other ancillary businesses may shore up their value chains, and production and inventory capacities. Long-term investments may similarly be incrementally synthesised to undertake requisite capacity generation, entrench a dense and widely accessible charging network, and increase the share of renewables in the concerned charging mix.

A clear target will also enable a coherent policy response- moving away from policymaking in silos to achieve cross-sectoral synergy. This is pivotal to the success of EV adoption since concerted dialogue on the role of private sector, shared mobility, modal shifts, land use for charging station siting, public charging infrastructure, etc. can only happen once the end goal for adoption is clearly defined. It will also raise India’s position with respect to the Paris Agreement and the SDGs while acting as a pivot for all future conversations around EVs.

At present, more than 20 countries have specific electrification targets. The two tables below present EV sales numbers for some of those regions and countries

While it may be premature to draw any causal linkages at this stage between targets and electric vehicle sales, it is undeniable that long-term strategisation aided by clear targets has played a key role in the success of countries like China. Several countries in Europe which have announced electrification targets, including Spain, France, UK, the Netherlands etc., constitute major auto export destinations for India. The opportunity cost of not reorienting its auto value chains could manifest itself in the loss of auto manufacturing dominance for India.

SIAM suggests that India may target 40 percent of new passenger vehicle sales and 100 percent public intra-city transport electrification by 2030. Similarly, NITI Aayog in its forecasts had mentioned that India could achieve electrification of 70 percent of all commercial cars, 30 percent of private cars, 40 percent of buses, and 80 percent of two-wheeler and three-wheeler sales by 2030. Based on these assessments, realistic yet forward looking goals may be jointly identified by the government and civil society. The policies need not just have a framework for the end product but additionally support each stage of the EV value chain, in line with circular economy principles.

India may approach its target in multiple ways. The government may pursue strong electrification targets for government fleets and public transport vehicles, and aggressive emission reduction targets for two and three-wheelers. New Zealand, for instance, has mandated select government agencies to choose an EV when replacing a vehicle. On the demand side, positively exclusionary non-fiscal measures such as zero-emission zones, toll fee exemptions for EVs, specially designated parking spots etc. can gradually make ICE vehicles less desirable for the commuter and leverage the resultant reduction in consumer demand to facilitate the switch to electric.

There can be a variety of ways to get there once we know where we want to be. India is on the cusp of the greatest disruption in its automotive history. And it needs a clear and unambiguous target to set the pace for all stakeholder actions to coalesce around this common goal. The building blocks are in place; the industry is primed for the transition- all we need is a number to chase.