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How Far Is India From Achieving Its E-mobility Goals? The Indian electric vehicles ecosystem is at a nascent stage, however push from the government and the industry players' zeal to develop the space has made many start-ups join the bandwagon

By Shreya Ganguly

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According to a June 2019 report by the Centre for Science and Environment, air pollution accounts for 12.5 per cent of all deaths in India each year. Children are the most vulnerable as poor air quality leads to death of over 100,000 children below the age of five in India. "While India was one of the first countries to pledge the phasing out of non-electric vehicles, its national scheme to promote the sale of e-vehicles is yet to pick up," the report noted.

The future of electric vehicles (EVs) in India now has the attention of both public and private stakeholders. Along with the central and the state governments which are pushing the EV industry, private participants are also stepping up their game to compete globally.

While speaking at EVConIndia 2019, an EV conference which was organised by The Blue Circle, Pavan Choudary referred to EVs as "zombie" vehicles as the idea faded in 1900s and resurfaced in 2000. "So while it was hibernating, a lot of changes happened. The scenario is extremely complex, the ecosystem is complex and there are several stakeholders," Choudary, chairman of EVCon India, explained.

India's Plans For EV Ecosystem

In a bid to boost the EV sector in India, the Central government in April 2019 launched the much-awaited second phase of FAME (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles) with an outlay of INR 10,000 crore to be invested in the span of three years. The scheme was launched with a vision to change 30 per cent of automobiles sold in India to EVs by 2030.

FAME II aims at support 1 million two-wheelers, 500,000 three-wheelers, 55,000 four-wheelers and 7,000 buses that operate on lithium-ion batteries or other electric power-train. The policy also proposed setting up of 2,700 charging stations across the country with availability of at least one charging station in a grid of 3 km x 3 km. Apart from the central scheme, nearly 10 states are ready with their state EV policy to boost the industry.

In the Union Budget 2019, Finance Minister Nirmala Sitharaman announced that the central government is looking to make India a global hub of EV manufacturing. The government proposed to reduce GST for EVs from 12 per cent to 5 per cent. She also said that some EV parts would also be exempted from customs duty. Sitharaman also announced that the government will provide additional income tax deduction on the loans taken by users to purchase EVs.

Indian EV Industry

The EV ecosystem is at a nascent stage in India. However, a push from the government and the industry players' zeal to develop the space has made many start-ups to join the EV bandwagon.

Companies such as Ather Energy, PureEV, Okinawa, Avan, Garvit are looking to disrupt the EV space with innovation. Domestic and foreign automobile manufacturers such as Audi, Hyundai, Kia and MG Motor have announced the launch of their own EVs. According to the EVConIndia white paper, 750,000 units were sold in India in FY2018-19.

A report released in October by the World Economic Forum and Ola Mobility Institute noted India can potentially become the largest EV market in the world. "The role of government is crucial for accelerating adoption. Right now, the uptake of electric vehicles is slow due to the high upfront cost and range anxiety. But, long-term investments in R&D will create sustained growth," Christoph Wolff, head of mobility, World Economic Forum had said in a statement.

Investment In EV Space

While speaking at EVCon India, Vinit Bansal, CEO and founder of EV Motors India, said the upfront costs are very high and thus financial re-engineering is very important for e-mobility.

According to the whitepaper, earlier investment in this sector was difficult, however the space has been gaining attention in recent years now that the government is bullish towards the EV industry.

Kavan Mukhtyar, partner and leader at PwC, also said during the event that resolving financial bottlenecks is the "key to the puzzle" to expand the EV fleet. He, however, added that apart from financial re-engineering, business model renovation can also address the financial issues.

Shreya Ganguly

Former Features Writer

Covering startups and investments for Entrepreneur India. Previously a startup correspondent at Inc42. Reach out to me with interesting story ideas at sganguly@entrepreneurindia.com. 
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