Veer Singh, CEO, Lord’s Automative Pvt Ltd
India’s electric vehicle (EV) sector is on the brink of a transformation. Presently, EVs account for only around 2-4% of total vehicle sales, but in 2030 the prognostics mention it could witness a drastic increase in sales in terms of numbers. 2025 promises to be a watershed year between the changing nostalgic attitudes of policy-making, technology improvements and more shifts in consumer attitude and behaviour.
Policy Momentum and Initiatives by Government
The Indian government has shifted its focus on drafting policies that facilitate the immediate adoption of EV as the government aims for 30% EV penetration by 2030 and is actively promoting a self-reliant EV ecosystem. These policies include the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) initiative (2015), which focused on providing subsidy schemes for two-wheeler, three-wheeler and bus electric vehicles. The FAME II start-up scheme focused on putting public and shared transport on electric mode under its aegis starting from April 2019. Last March-onwards, the government reduced import duty on EVs above $35,000 from 100% to 15% in favour of local investment for further encouragement.
To support these initiatives, the production linked incentive (PLI), launched in September 2021, will further promote local manufacturing of emerging automotive technologies products including components and batteries for EVs. Altogether, those policy initiatives create a conducive environment for the penetration of electric vehicles into India.
Market Dynamics and Consumer Trends
The Indian market has been very dynamic when it comes to its EV segment. More than 1.8 million electric vehicles were registered from April to December last year, reflecting a 30% growth over the previous one. A forecast for 2025 puts the number of electric vehicles on India’s roads at 500000, or 51% of that market’s forecast growth.
Of course, human behaviour changes as well. People know much more about environmental issues and the long-term cost advantage of EVs. This trend will be met by manufacturers with the introduction of a wide spectrum of electric models across segments. There will be 18 new EV models launched in 2025, outstripping the number of petrol and diesel vehicles launched in that same period.
Infrastructure Development & Technology Shift
“Charging infrastructure was crucial to EV adoption at large in the country. India has proof of the infrastructure developments in these terms, with public charging points increasing ninefold from just 1,800 in February 2022 to 16,347 by March 2024. The government intends that by 2030 there be at least one charging station per square kilometer in cities and on highways every 100 kilometers fast-charging stations.
Advancing technology also contributes to bringing EVs to life. Improvements in battery technology have led to a longer distance a vehicle can cover and shorter charging times. Moreover, the push towards localization of battery production and recycling initiatives aims to mitigate raw material shortages and also to reduce dependency on imports.
Challenges and the Road Ahead
There is, however, a plethora of challenges hounding the movement. Unreasonable costs, so few charging points in the hinterlands, and battery life drawbacks continue to impede mass adoption. The announcement by Jaguar Land Rover about suspending plans for EV production at Tata’s new plant underlines the difficulty of balancing a domestic cost-quality regime. Hope, however, brightens now with a promise of government action to tackle these predicaments through policy measures and infrastructure enhancement. If stakeholders continue to work together, in 2025, the carriers will indeed see the turning point for India’s EV revolution.
The whole lot that Indian government did to popularize use of EVs had to be decided by actions taken by the government. These include the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) initiative in 2015, which focused on providing subsidy schemes for two-wheeler, three-wheeler and bus electric vehicles. The FAME II start-up scheme focused on putting public and shared transport on electric mode under its aegis starting from April 2019. Last March-on, the government reduced import duty on EVs above $35,000 from 100% to 15% in favor of local investment for further encouragement. To support these initiatives, the production linked incentive (PLI), launched in September 2021, will further promote local manufacturing of emerging automotive technologies products including components and batteries for EVs. Altogether, these policy initiatives create a conducive environment for the penetration of electric vehicles into India.