India Could Become Global EV Hotspot but Adoption Slow: WEF-Ola Mobility Report

The report has identified ten states and union territories that are mobilizing the country towards electric mobility

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The electric mobility industry in India is just beginning. In the past few years, the country has seen a surge in government initiatives to adopt electric vehicles in public transportation while the country has also started preparing the necessary infrastructure (charging stations) for the widespread adoption of electric vehicles.

A new analysis by the World Economic Forum and the Ola Mobility Institute shows there are ten states and union territories that are building momentum for EV usage in three sectors: manufacturing, infrastructure, and services.  The report, EV Ready India – Part 1: Value Chain Analysis of State EV Policies, examines programs and policies in Andhra Pradesh, Bihar, Delhi, Karnataka, Kerala, Maharashtra, Tamil Nadu, Telangana, Uttarakhand, and Uttar Pradesh. It highlights the opportunities for the sector and builds a common framework for analyzing state EV policies through trend analysis of value chains.

Now, given India’s role as part of the global big four automotive players (alongside China, Japan, and the United States), the report underlines that large-scale changes to the Indian market that would affect the industry’s global footprint.

Final EV Policy

Source: WEF

“With many more states in the process of designing their EV policies, policy-makers, businesses and practitioners alike can use this framework to analyze state policies for sustainability and longevity,” said Christoph Wolff, Head of Mobility, World Economic Forum. “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 a long-term investment in R&D will create sustained growth.”

“India has taken up an ambitious target to become a $5 trillion economy by 2025,” said Anand Shah, Head, Ola Mobility Institute. “the country has placed equal importance on environmentally sustainable growth. Mobility holds significant promise for India to enable low-carbon solutions. OMI, in partnership with the World Economic Forum, intends for this framework to support the country’s readiness to go electric.”

While the approaches vary among these states and (Union Territories) UTs, the report highlights three emerging trends:

 The first is that most states aspire to be manufacturing hubs for EV and EV components. Production of clean-fuel batteries, recycling, and storage are wholly incentivized. This aligns with the national “Make in India” agenda and can provide case studies for how to roll out similar production facilities. For example, Uttar Pradesh and Maharashtra EV policies emphasize promoting EV manufacturing.

The second trend, infrastructure development, was primarily a response to anxiety about the range of EVs: i.e., most states have provisions for installations of charging infrastructure in public and private places. Uttar Pradesh is targeting 2 lakh charging stations by 2024, while Andhra Pradesh is targeting 100% electrification of buses by 2029.

The third trend is an emphasis on the services the EV value chain can provide through public awareness. These include skilling programs in Tamil Nadu, fiscal incentives in Maharashtra, and non-fiscal incentives like retrofit services in Telangana. These are all examples of how states and territories try to connect consumers and manufacturers.

Fueled by the national agenda of electrification and bolstered by government-led initiatives, the public and private sectors alike have commenced their respective and joint transitions to electric mobility. However, the uptake of EVs has been slow, reflecting their high upfront and lifecycle costs. To overcome these challenges, funding is required for research centers and centers of excellence, which in turn, would boost overall R&D in the sector and, subsequently, manufacturing. Considering the nascent nature of the market, government backing and direction are crucial for accelerating adoption and deployment of electric mobility. “For a price-sensitive market like India, developing incentives for electric (clean) kilometers run versus electric vehicles purchased makes economic sense and is suggested to be the guiding principle for the national strategy,” Wolff said.

In India, the central government has asked its think-tank the NITI Aayog to develop a policy that will help promote EVs in the Indian market. The NITI Aayog has put out a proposal stating that after 2025,  only EV two and three-wheelers must be exclusively sold in the country. The think-tank expects a complete transition to EVs by 2030, though it sounds a bit overambitious at this juncture.

In March 2019, the Union Cabinet approved the proposal to implement a program titled ‘Faster Adoption and Manufacturing of Electric Vehicles’ in India Phase II (FAME India Phase II) aimed towards the promotion of electric mobility in the country. Moreover, the central government has planned an outlay of ₹5 billion (~$70.3 million) for the second phase of its FAME program in a bid to propel EV adoption on a bigger scale. The program was launched in 2015, and it was successful in increasing the share of hybrid and EV passenger vehicles from zero in FY 2012-13 to 1.3% in the FY 2015-16.

Recently, Mercom analyzed the two and three-wheeled segments of EVs in the country and the players that are taking it forward.

Ankita Rajeshwari Ankita is an editor at MercomIndia.com where she writes and edits clean energy news stories and features. With years of experience in the news business, Ankita has a nose for news and an eye for detail. Prior to Mercom, Ankita was associated with The Times of India as a copy editor for the organization’s digital news desk. She holds a Bachelor’s degree in Psychology from Delhi University and a Postgraduate Diploma in journalism. More articles from Ankita Rajeshwari.

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