Vision 2030: How Can India Achieve its EV Target? Since 2017, a total of 24.7 lakh EVs have been sold in the country. While on the face of it, it may seem a big number, a back of the envelope calculation shows that it constitutes merely 1.8% of the total vehicle sales in the country and nowhere near the 30% penetration eyed by India by 2030.

In fiscal year 2022-23, India sold 11.79 lakh EVs, which is a whopping 165 per cent more than FY 2021-22, as per data by the Society of Manufacturers of Electric Vehicles (SMEV). Since 2017, a total of 24.7 lakh EVs have been sold in the country. While on the face of it, it may seem a big number, a back of the envelope calculation shows that it is merely 1.8% of the total vehicle sales in the country and no where near the 30% penetration eyed by India by 2030. The case of going for electric vehicles are many. Not only are they less expensive to operate, but also require less maintenance, and are better for the environment than their internal combustion engine equivalents (ICEs). The space is currently dominated by two-wheeler companies.

On the other hand, the share of four-wheelers in the total sales is quite less and is presently restricted to just four models— Nexon EV and Tigor EV by Tata, Kona EV by Hyundai, and ZS EV by MG Motor. However, by 2027, there are 20-25 more more models expected on roads. Entrepreneur India reached out to a number of players in the EV industry to find out some ways to fastrack the adoption.

Continuation of subsidies

In order to boost the adoption of EV vehicles, there is demand for continuation of subsidies beyond 2024 by a larger part of the industry. It must be noted that the sales of EVs saw a consistent increase year over-year since the introduction of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme introduced by the Ministry of Heavy Industries. The scheme in its first phase ran for 4 years from 2015 to 2019, and commenced its second phase in 2019, for a period of 3 years, (further extended till March 31, 2024).

Says Mayank Jain, CEO, New Auto, CarDekho Group, "To encourage further adoption and sustain the confidence of original equipment manufacturers (OEMs) in expanding manufacturing and localization, it is necessary to continue providing subsidies, even if in a reduced form. These subsidies will continue to stimulate adoption and enable OEMs to scale up their production and localization efforts."

Commenting on the same, Dr. Sudhir Mehta, Founder & Chairman, EKA Mobility & Pinnacle Industries Limited, says "Discontinuation of FAME II will cause a significant setback to India's nascent EV segment which is expected to be the key driver of India's ambitious sustainability, energy transition, and net-zero carbon emission goals. India is an extremely pricesensitive market, where affordability is a crucial factor, much above the vehicle's environmental impact, speed, features, luxury, comfort, etc. The EV industry needs more subsidies and support from the Government, especially the MSME sector and startups that are bringing innovation and localization to this segment."

Mehta is also of the view that subsidy should be extended to privately-owned electric buses as well. "We still have a long way to go to expedite the adoption of electric vehicles, especially electric buses, and I believe that largely the reason is that subsidies are given only to the State Government Transport Units (STUs). No subsidy is given for private sales of buses," adds Mehta.

Boost to Infrastructure (Battery Swapping)

The paucity of charging stations (there are over 10,000 stations for 23 lakh EVs on roads) has been acting as a great barrier for achieving India's ambitious EV target. However, amidst this, battery swapping has come as a boon. (For the uninitiated, battery swapping is a process in which a drained battery is exchanged for a fully charged battery at a battery swapping station).

Says Gautham Maheswaran, Co-founder, RACEnergy, "Battery swapping eliminates the need for the high upfront investment to adopt an EV. Almost 50-60% is the cost of battery itself. In EV, the battery is the fuel which is going to power the vehicle. When a user subscribes to a battery swapping network instead of going for a battery, the responsibility of setting up the infrastructure lies with the network which enables them to swap batteries whenever they run out of it. The battery becomes a shared asset so the end users doesn't have to take the headache for charging or cooling them down. The network takes care of it and also looks after the degradation of the batteries and where they can be utilized. For the end user, the otal cost of ownership comes down drastically. "

"It is extremely helpful for last mile delivery guys and commercial fleet who don't have enough time on the road. However, in order to boost adoption, the infrastructure needs to come at par with the number of vehicles," adds Maheswaran.

Better rates for financing

While banks and NBFCs have come forward for financing the electric vehicles in the country, the interest rates offered aren't very attractive. There is very small difference between the rate at which an ICE vehicle is financed vis-a-vis an electric one. The low interest rates can go a long way in boosting EV adoption in the country and thereby achieving the target. Also, financiers are very hesitant to do the funding of the EV buses, due to huge capex costs and charging higher IRR, that needs to be looked into. "Bringing down the capex cost of electric vehicles is a big challenge and only with more domestic players, this shall witness a downward trend in the next 1-2 years," says Mehta.

Widening the scope of PLI scheme

In 2021, ProductionLinked Incentive (PLI) scheme was announced to boost the production of electric and hydrogen fuel-cell vehicles. While the scheme included incentives worth INR 26,000 crore it didn't include startups & MSMEs within its ambit. "With the PLI Schemes being favourable only for the established big corporates and multinationals, Startups & MSMEs tend to lose since either way they are struggling for capital," says Ajay Sharma, Secretary General, Society of Manufacturers of Electric Vehicles (SMEV). Lastly, industry people feels that manufacturers should focus on the value and solutions proposition while selling the products. Says Yogesh Bhatia, MD and CEO, LML, "If all the OEMs and manufacturers will work with the same intent and include value propositions in products that have been missing till now, it will change the adaptability and behavior of the consumers towards EVs."

Enhancing customer awareness: While growth in the electric vehicles industry is on an upward tick, it has much ground to cover to be able to realize the government's ambitious 2030 target. The consumer perception of electric vehicles in India is still weak compared to internal combustion engine (ICE) vehicles.There is still a lot of confusion among customers about whether they should buy an EV vehicle or which product to buy. So education & awareness becomes really important.

Players like CarDekho are taking a lead in enhancing awareness, educating customers, and simplifying the understanding of various products. "We are also playing a critical role and contribute in this regard. With a market-leading brand portfolio of automotive platforms that includes CarDekho, Bikedekho, Zigwheels, Powerdrift and Trucksdekho, we are increasing our efforts to spread awareness, educate customers, and help demystify products. We have introduced widgets on our websites and apps that allow customers to compare the total cost of ownership for an EV vs an ICE vehicle," adds Jain.

Kapil Shelke, Founder & CEO, Tork Motors agrees with Jain and says, "It is essential to raise the general awareness of the advantages of EVs, including their lower operating costs and lower emissions. Public awareness campaigns, and focused projects can help dispel misconceptions, address issues, and promote the benefits of EVs. This may foster a favourable attitude and increase consumer interest in EV adoption. Therefore, in order to achieve it, a comprehensive and coordinated strategy that includes policy support, infrastructural development, technological breakthroughs, and cooperative efforts is needed."