EV Transition: Key Challenges for India

GS3 – Infrastructure & Environment

Context:

A recent study highlights the major risks and challenges India faces in transitioning to Electric Vehicles (EVs).

EV Adoption: Goals and Current Status

 

• Government Targets for 2030:
  • 30% electrification of private cars
  • 80% for two- and three-wheelers
• Current EV Market Share: Around 8% of total vehicle sales
• Projected Growth:
  • EV numbers expected to rise from 1 million in 2022 to 45–50 million by 2030

Major Challenges in EV Adoption

1. Financial Strain on Automakers

• Auto companies face cash flow pressures due to slow and uncertain EV adoption timelines.

2. Power Grid Stress

• Electricity demand from transport is set to rise by 59% by 2030.
• Risk of grid overload, especially with continued reliance on coal-based power, undermining climate goals.

3. Charging Infrastructure Deficit

• India has only ~2,000 public charging stations.
• World Bank: Investment in charging infra is 4–7 times more impactful than direct subsidies.

4. Environmental Trade-offs

• Without a clean energy supply, EV emissions can match those of ICE (Internal Combustion Engine) vehicles.
• Pollution may shift from urban areas to coal-heavy rural zones unless renewable energy is integrated.

5. Battery Supply Chain Risks

• India is largely dependent on imports for crucial materials like lithium, cobalt, and nickel.
• Low participation in the global battery value chain increases strategic and economic vulnerability.

6. Unequal Subsidy Distribution

• Tax incentives mostly benefit wealthier 4-wheeler buyers, raising concerns over equity and effectiveness.

7. Diverse Charging Requirements

• 2Ws and 3Ws require basic AC charging, while 4Ws need single- or three-phase charging, complicating infrastructure standardization.

8. Policy and Investment Gaps

• India needs 7 million public chargers by 2030.
• Urgent need for:
  • Public-private investment
  • Time-of-use tariff reforms to prevent grid overload and enhance charging efficiency

Government Initiatives Supporting EV Transition

1. National Electric Mobility Mission Plan (NEMMP) 2020
2. E-Amrit Portal:
   Launched at COP26 (Glasgow), serves as a comprehensive EV information hub.
3. GST Rationalisation:
   • EVs: Reduced from 12% → 5%
   • Charging equipment: Reduced from 18% → 5%
4. PLI Scheme for Advanced Chemistry Cells (ACC): Aims to lower battery costs through domestic manufacturing incentives.
5. Green License Plates:
   Introduced by the Ministry of Road Transport & Highways (MoRTH) to distinguish EVs.
6. Go Electric Campaign:
   Launched to raise awareness about EV adoption and benefits of cleaner mobility.
7. EV30@30 Campaign:
   A global initiative targeting 30% of new vehicle sales to be electric by 2030.