Keep off that brake pedal: India's EV transition has no time to lose
The stellar progress so far has been made possible by a forward-looking and purposeful policy push, starting from Faster Adoption and Manufacturing of Electric Vehicles (Fame) to the recent PM E-Drive and scheme for making electric passenger cars in India. There are several ongoing interventions and initiatives to address rampant bottlenecks in financing, credit mechanisms, charging networks and the battery value chain.
So far, the government has spent more than ₹40,000 crore on incentives, which in turn has led India to a 7.8% share of EVs in annual vehicle sales.
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We now need a well-calibrated push for large-scale adoption of EVs across India's cities, both big and small, without digressing from the national EV agenda; we must not risk derailing the impressive progress we have made thus far.
The government has spent enormous funds to incentivize the automobile industry and battery ecosystem while taking decisive measures to localize manufacturing, ensure domestic value addition and enhance the uptake of the production-linked incentive scheme. While incentives and subsidies played a key role in market development, the path ahead requires setting up long-term expectations and visibility that can step up the momentum.
The rapid addition of renewable energy to green India's power grid presents a unique opportunity to create a zero-emission value chain, from power generation to transportation. Globally, markets are moving decisively towards zero-emission vehicles (ZEVs), with strong policy signals to accelerate EV adoption. India must craft tailored strategies for different vehicle segments, given varying levels of market maturity. Clear market and regulatory signals are necessary to unlock long-term investment, reduce risk for manufacturers and financiers.
This calls for a decisive shift: from incentives and subsidies to clear mandates, regulatory confidence and long-term innovative solutions contextualised for the Indian market.
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Holistic development of the battery ecosystem: To scale up EV adoption across modes and geographies, it is crucial to develop battery standards aligned with global benchmarks, besides creating a robust framework for data sharing grounded in the core objectives of safety, sustainability, resource efficiency and circularity. A nodal agency should be set up to ensure compliance, streamline mechanisms for data storage and explore business models for viability. This can aid end-of-life battery management, thereby reinforcing a circular economy.
Create a circular and accountable ecosystem: To ensure a thriving battery circularity ecosystem, we must ensure that the Extended Producer Responsibility (EPR) portal is enabled with an audit function. Further, third-party validation should be encouraged for producer declarations. The responsibility for old-battery collection should be borne by both recyclers and producers, with unrestricted movement allowed between states. Finally, EPR pricing should be designed to suit different battery chemistries.
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Capture battery data for resource efficiency: To streamline the battery value chain and create a resilient and circular ecosystem, the government's department of science and technology recently unveiled a strategic pilot initiative: Battery Aadhaar, a unique digital battery ID to enable tracking of lifecycle data to support circularity, resource efficiency and regulatory compliance.
This is a breakthrough for energy storage as it strengthens our resolve to couple economic and sustainable development as we strive to become a net-zero economy by 2070. As our energy transition intensifies, we must also prioritize support for R&D and homegrown startups to explore indigenous technologies and help create a recycling market. We also need more collaborative platforms like the Battery 360 Alliance, which can assess ecosystem readiness and facilitate better decision-making by all stakeholders.
Introduce EV mandates: At this critical juncture of India's EV transition, we also need new nudges towards EVs. We can begin with low-level mandates that could be progressively scaled up. Globally, countries with robust EV adoption have used varied supply-side norms to send market signals. India can chart its own course by using phased and locally adapted mandates for manufacturers and operators.
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Implement Café norms: We must implement the tightened Corporate Average Fuel Efficiency (Café) norms while tapering off the super credits provided to manufacturers in non-EV segments. These regulations also serve as motivators for manufacturers to invest more in innovation and accelerate economies of scale to bring down costs, helping the EV industry reach a tipping point.
The scope of Café norms must be thoughtfully extended beyond just 4-wheelers to cover all major vehicle segments (especially commercial vehicles like trucks), given their emissions and substantial share in India's mobility ecosystem. These regulations will accelerate the adoption of EVs and further push the development of a domestic market, which could create green livelihood opportunities for millions.
Expand charging infrastructure to underserved areas: India suffers from an uneven charging infrastructure distribution, with operators opting for high-traffic, commercially attractive zones, leaving low-demand or peri-urban areas underserved. For EVs to become the new normal in India's Tier 1 and 2 cities, we need corridor-level planning, not just a focus on wide distribution.
We must establish a nodal agency that can create cross-subsidization opportunities for a balanced infrastructure rollout that offers equitable charging-point access. At the sub-national level, it will help to enhance the transparency and accountability of urban local bodies to strengthen and streamline frameworks for efficient service delivery through mechanisms like single-window clearances.
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By integrating these strategic shifts in our short-, medium- and long-term roadmap, India will not only pave the way for a cleaner future, but also solidify its role as a global economic powerhouse while inching closer to its vision of Viksit Bharat by 2047 with a $30 trillion economy.
These are the authors' personal views.
The authors are, respectively, G20 Sherpa, India; and executive director, Integrated Transport, Clean Air and Hydrogen, WRI India.
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