has set clear targets for the adoption of EVs, in the short-term and long-term.
By 2030, 70 percent of commercial vehicles, 30 percent of personal vehicles, 40
percent of buses, and 80 percent of two-wheeler and three-wheeler sales are
expected to be electric.
While there are several
challenges for the absolute adoption of EVs in India, there are several
encouraging trends in the market. Post the COVID-19 lockdown, the automotive
industry also witnessed a surge in 2-Wheeler sales, of which a substantial
percentage was electric 2-Wheelers.
This trend indicates that the
Indian consumer is not only open to the idea of EVs, but is willingly adopting
a clean, sustainable mode of transport.
There are several factors that
contribute to this trend. The Indian government has consistently been focusing
on encouraging the customer to adopt EVs. The FAME 2 scheme, which aims to put
10 lakh electric vehicles on the road by March 2022, offers several incentives
for OEMs and consumers.
The Union Budget 2021-22 and
other schemes have also laid out further incentives to encourage people to move
to cleaner, sustainable modes of transport.
The most critical move announced
in the Union Budget 2021-22 was the long-awaited vehicle scrappage policy. The
policy, which allows people to get rid of vehicles older than 20 years, also
offers a number of incentives to do so. This includes a 5% rebate on new
vehicle purchase, and discounts and waivers on road taxes and vehicle
The scrappage policy will
definitely be instrumental in encouraging demand, and will also help consumers
move towards cleaner and more sustainable vehicles.
While we await the details of the
entire vehicle scrappage policy, which will be implemented later this year,
there are other announcements that have an immediate impact on the demand of
The Government of India reduced
GST rates on electric vehicles from 12 percent to 5 percent. The rates were
also reduced on EV infrastructure, like charging stations.
There are also additional
incentives from states, such as the Switch Delhi campaign by Delhi. Launched in
February 2021, the campaign aims to create more awareness about electric
vehicles, and also intends to convert a part of the government fleet to
electric vehicles shortly. Delhi also offers incentives to people purchasing
electric vehicles, and is investing in setting up the required charging
While the above factors are
directly related to demand and awareness creation, there are several schemes
that will benefit the industry in the long run.
The Union Budget saw an increase
in custom duties on certain parts and materials, which will encourage
manufacturing at a local level. The localisation will not only help create more
jobs, but will impact the long-term pricing of the vehicles as well.
Today, the society is very
dynamic and the consumers are increasingly conscious of the carbon footprints
and environmental hazards that fossil fuels cause. The consumer’s needs have
evolved over time and are now looking to invest in not just affordable,
efficient vehicles but also sustainable.
Coupled with government-led
initiatives, the current pandemic outbreak is acting like a catalyst. The daily
commuters, who used shared mobility, are now moving two electric 2-Wheelers as
it is a safer and more economical mode of transportation. As per Reportlinker,
the electric two-wheeler market in India is anticipated to grow at a CAGR of
over 44% during the period 2019–2025.
of EV OEMs in India
Realising the opportunity that
India presents, many startups and global EV OEMs have entered the market. This
not only furthers technological advancements in the sector, but also helps in
raising more awareness about EVs among the general population, and vehicle enthusiasts.
Electrification has opened doors
for many advanced technologies. The global OEMs entering the Indian market
would give Indians an opportunity to explore next-generation vehicles without
paying luxury taxes, creating more demand among HNIs etc.
of cost-effective solutions
While there is a rising awareness
about EVs, we still have a few miles to go in terms of infrastructure. This
challenge has created range-anxiety among the general population. To address this, 48-volt or 48V electrical
systems could be the instant and a feasible, simple solution. As a mild hybrid
48V system does not require a complete overhaul of the existing system, it
makes it a commercially viable option.
In case of
passenger vehicles, which are becoming feature-heavy with the addition of ADAS
and ARAS features, infotainment systems etc, 48V mild hybrid becomes an
invaluable option. The new features, and the old, require higher power. With
the mild-hybrid 48V, these features can be adequately supported without
compromising on other functionalities.
We are heading towards
electrification transformation. Government initiatives, rising awareness, and
entry of global EV OEMs has created a new demand among people. More people are
opening to adoption of EVs. While the infrastructure catches up with the
increasing demand, 48V systems are a cost-effective and powerful alternative,
and can aid the electrification transformation.
Anurag Garg is
the Managing Director & Country Head of Vitesco Technologies in India. He
comes with over 32 years of experience in the Industrial & automotive