India is slowly moving towards its Goal to become an Electric Vehicle Country by 2030
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The Electric Vehicle (EV) plans in India that stayed on paper so far seems to be turning into a reality with the Indian government's recent plans to mandate cab-hailing companies like Ola and Uber to convert 40% of their fleet of vehicles to electric by April 2026.
India has plans to become a hundred percent electric vehicle company by 2030 but the current situation of the country is at its infancy stage. In the last fiscal year that ended on 31 March 2019, only 3,600 units of EVs were sold in India which is just 0.1% of the total 3.3 million fuel cars sold in the country over the same period. This number varies insignificantly against the 1.3 million EVs sold in the largest market of China.
How India's automobile sector dynamics may change?
Although India has been pushing for EV industry since the past few years, it has not taken any significant shape because of the lack of infrastructure that electric vehicles require. Apart from this, the Indian automobile manufacturers that have made significant investments to sell cars that run of fuel are not taking the leap to build electric vehicles. Now if the government's plan of EVs for cab aggregators is implemented, India's automobile industry will be forced to follow the suit. This is because if the Indian companies don't build EVs, cab aggregators will be forced to import it from other countries and in this case Indian manufacturers will lose revenues.
According to the market reports, this plan is likely to be implemented in four stages, 2.5% by 2021, 5% by 2022, 10% by 2023 and 40% by 2026. With about more than a million fleet size of just one cab aggregator which will increase substantially by 2026, about 40% EVs out of this will be a good number. Apart from this, there is a proposal to transform private-use motorbikes and auto-rickshaws to electric vehicles within next 6-8 years. Also, chances are high that the companies in the delivery business such as e-commerce and food delivery will have to adopt electric motorbikes by April 2023. Thus, a huge market for EVs are being created by the Indian government using strict regulations which will force the domestic automobile manufacturers to focus on EVs.
Government's efforts to set-up EV infrastructure
In terms of infrastructure required for electric vehicles, the government has begun the groundwork as on 5 Mar'19, the government revealed details of the second phase of the Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME) scheme. It plans to infuse 10,000 crore over three years starting from 1 Apr'19 for infrastructure development and encouraging faster adoption of electric vehicles.
In the first phase of FAME, the government had allocated INR 895 crore in April 2015. As part of the FAME-II, the government stated that it will set up 2,700 charging stations in metro cities and some of the one million-plus towns, offer EV purchase incentive to 10 lakh two-wheelers, five lakh three-wheelers, 55,000 four wheelers and 7,000 buses. Under FAME-II, the government will give upfront incentives on the purchase of electric vehicles, infrastructure development, including charging stations.
