Transitioning to an electric future
Is India ready to embrace electric vehicles?
India is among the five largest automobile markets in the world. At present, electric vehicles (EVs) form a small share of this market. A report by Bain & Co suggested that by 2030, electric vehicles could represent more than 40% of India’s automotive market and generate revenue exceeding $100 billion.
A working paper titled ‘Igniting the Bright Spark: Through the Looking Glass on Electric Mobility in India’ by the Economic Advisory Council to the Prime Minister of India (EAC-PM) emphasises that EVs are far more economical than fuel-based vehicles.
Beyond the economics, transitioning to zero-emission vehicles like EVs will help drastically curb air pollution and greenhouse gases. A recent consumer survey by the Sustainable Mobility Network underscores the growing consumer preference for sustainable and environmentally responsible companies.
“Research shows the annual number of shoppers is likely to increase to 425 million in 2027. The Indian millennial is conscious about their consumption habits and choices. We have an opportunity to leverage this consumer appetite to convert brands and companies net-zero and sustainability intentions into real fleet transition action,” says Saudamini Zutshi, the Sustainable Mobility Network.
The EV India
Climate Group, a non-profit organisation, is working for a world of net zero carbon emissions by 2050. In India, Climate Group is focused on systems with the highest emissions, such as energy, transport, industry, the built environment, and food. EV100 is their global initiative, which brings together companies committed to making electric transport the new normal by pledging to switch over to 100% EVs by 2030.
“India is one of EV100’s largest markets for transition to EVs. EV100 is bringing together influential businesses in India to deploy only EVs in their light vehicles segment of their fleet and operations. They do this by switching their owned and contracted fleets up to 7.5T to electric vehicles and providing charging infrastructure by 2030.” — Atul Mudaliar, Director of Systems Change, Climate Group India.
Pledges to turn electric
Major e-commerce and food delivery businesses in India are adopting 2- and 3-wheeler electric vehicles for their delivery fleet. Indian companies have made the largest corporate electric fleet commitments among the global EV100 members.
The EV100 Progress and Insights Report 2024 spotlights how India’s government policy for EV adoption has given EV100 members the confidence to commit over 390,000 corporate fleet vehicles in India to go electric. Currently, these businesses collectively operate over 19,000 EVs.
The EAC working paper comments on India’s underwhelming performance in the EV space. According to the EAC authors Bibek Debroy and Devi Prasad Misra, high costs, ‘range anxiety’, limited model choices, and uncertain resale value are impeding the large-scale adoption of electric vehicles.
The report also noted the inadequacy in the EV charging infrastructure, estimated to be close to only 6586, as of March 2023. The number is inadequate for EV ambitions of India, which is a signatory to EV30@30 — an international program of the Clean Energy Ministerial that aims to reach a 30% sales share by 2030. The lack of charging infrastructure is also an impediment for Indian EV100 companies to meet their 2030 EV targets.
Electrifying Medium- and Heavy-Duty freight vehicles
Despite comprising just 2% of all registered on-road vehicles, medium- and heavy-duty freight vehicles (MHDVs) are responsible for more than 45% of on-road emissions. Their disproportionate contribution to emissions makes them a prime candidate for the transition. In India’s pursuit of net zero by 2070, decarbonising transportation is essential.
“As the sixth largest market for the sale of medium- and heavy-duty trucks (MHDTs), India has over 5 million trucks running on its roads (VAHAN dashboard, MoRTH), and over 90% of road freight movement uses diesel as a fuel. Most businesses move their goods almost entirely through third-party players rather than through their own fleet, making the trucking industry commercially very dynamic. This is the kind of impact that a complete transition to EVs in India’s corporate sector can have. It will produce a domino effect that can extend into the logistics market, further cleaning supply chains all over India,” says Mudaliar.
Just e-transition
A study by the Committee for Development Policy, United Nations, states that just transition is about ensuring that no one is left behind or pushed behind in the transition to low-carbon and environmentally sustainable economies and societies.
The transition to EVs is predicted to cause major transformations in technology, manufacturing methods, and consumer habits, thereby impacting a large number of key stakeholders. India presents a unique market where livelihoods are associated with businesses not only formally but also through indirect and informal means. An e-transition is bound to influence employment dynamics in this sector.
“Delivery companies are becoming increasingly aware of the needs of their driver-partners, especially considering their consumer-facing role. This brings out the importance of drivers in the overall e-transition, as they are the primary users of these vehicles. To ensure a just and equitable transition, it’s imperative to focus on building technological awareness alongside upskilling drivers across all vehicle segments, including trucks.” — Atul Mudaliar, Director of Systems Change, Climate Group India.
Simultaneously, the Indian EV market is evolving by offering green manufacturing options, contributing to more sustainable operations for businesses and operators. An opportunity has opened up for new players in the market. As a result, the demand will be crucial in making electric vehicles a reality.
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