A joint report by the Confederation of Indian Industry (CII) and KPMG emphasizes that effective policies and faster decision-making are crucial for driving collaborations across stakeholders in India’s electric vehicle (EV) ecosystem. These efforts could help India advance EV adoption, cut its oil import bill, and significantly lower carbon emissions, steering the nation toward a sustainable future.
Titled “Enabling Infrastructure Changes Through Policies for EV Growth”, the report highlights that EVs are a key solution to India’s challenges in energy reliance and emissions, aligning with the country’s COP26 commitment to achieving 100% zero-emission vehicles by 2040. India’s EV market has seen rapid growth over the past five years, with FY24 witnessing sales surpassing 1.2 million units and a 5% market penetration. The nation aims to achieve a 30% EV penetration by 2030 under the EV30@30 campaign.
The report highlights four primary factors driving the growth of the electric vehicle (EV) market in India. First, policy support plays a critical role, with initiatives such as FAME II, GST reductions, and the PLI scheme fostering industry growth. Second, total cost of ownership (TCO) parity is a significant advantage for EVs, offering considerable savings in operational costs when compared to traditional internal combustion engine (ICE) vehicles.
Third, technology access is crucial, as innovations in battery technology and charging infrastructure help enhance EV performance and usability. Finally, a burgeoning start-up ecosystem is further fueling growth, with over 400 start-ups across various EV sectors, including original equipment manufacturers (OEMs), battery producers, recyclers, and charge-point operators.
To support this growth, the report emphasizes the need for substantial improvements in four critical areas of infrastructure. Physical infrastructure must expand to include a denser network of charging stations and efficient battery recycling facilities. Similarly, power infrastructure is vital, with a focus on integrating renewable energy sources and ensuring a reliable power supply for EV charging needs. This will help address the increasing demand for energy as EV adoption rises.
Additionally, economic infrastructure improvements, such as facilitating easier access to financing for EV buyers and optimizing taxation across the value chain, will support market expansion. Lastly, the report stresses the importance of social infrastructure, advocating for widespread public awareness campaigns to educate consumers on the benefits of EVs. It also calls for the upskilling of various stakeholders to ensure the successful transition to a more sustainable and electrified mobility landscape.
The report also addresses India’s reliance on oil imports, which have averaged $100 billion annually over the past three years. Road transportation contributes 12% of the country’s total CO2 emissions, with a per capita emission of 0.2 tons. While measures like ethanol blending and fuel efficiency regulations have mitigated emissions, EVs offer a long-term solution aligned with India’s net-zero goals.
Government policies like FAME II, introduced in 2019 with a budget of ₹11,500 crore, and the PLI scheme for the auto industry, launched in 2021 with a ₹25,938 crore outlay, are driving manufacturing and innovation in EV technology. TCO analysis reveals EVs provide substantial savings compared to ICE vehicles, with estimated savings of 43% for two-wheelers, 27% for three-wheelers, 5% for four-wheelers, and 13% for buses.
The report concludes by urging faster policy implementation and fostering partnerships between government, private enterprises, and international stakeholders. This approach will spur innovation and infrastructure development, helping India meet its ambitious EV adoption targets while reducing emissions and oil dependency.
