The transport sector in India is expected to witness the highest growth in greenhouse gas (GHG) emissions, with a projected increase of 5.1% annually, reaching 510 million metric tons by 2030. In 2022, the sector emitted 340 million metric tons of GHGs, with road transport contributing 80% of this total. Emissions from two-wheelers (2W) and four-wheelers (4W) accounted for 70% of road transport emissions. This highlights the critical role of electric vehicles (EVs) in reducing environmental impact.
The need for transitioning to clean EVs in India is urgent for several reasons. Global temperatures have risen by approximately 1.5 degrees Celsius, and atmospheric levels of carbon dioxide (CO₂) and methane have increased significantly in the last 30 years. India, being the third-largest GHG emitter globally, faces severe air pollution problems, with the transport sector alone responsible for 1.7 million deaths in 2020. Additionally, transportation contributes to around 29% of PM2.5 pollution and 24% of PM10 pollution, making it the second-largest source of these pollutants. Furthermore, India relies heavily on crude oil imports, meeting 85% of its needs from abroad in 2023, leading to a significant trade deficit and economic challenges. Transitioning to EVs is essential for energy security, as automobiles account for about 55% of crude oil imports.
To meet its global sustainability commitments under the Paris Climate Agreement, India has pledged to reduce its GHG emissions by 33-35% by 2030 from 2005 levels, increase non-fossil fuel power capacity by 50%, and create an additional carbon sink to absorb 2.5-3 billion metric tons of CO₂. EVs play a crucial role in achieving these goals as they emit 25-50% fewer GHGs compared to internal combustion engine (ICE) vehicles across their lifecycle. Even if electricity is generated from fossil fuels, EVs still result in lower emissions due to the efficiency of large-scale energy production.
Globally, several countries have set ambitious targets for reducing transportation emissions from ICE vehicles by transitioning to EVs. China leads in EV adoption, with electric car sales more than doubling from 4 million in 2022 to 9 million in 2024, driven by supportive policies and infrastructure. Norway has the highest EV penetration globally, reaching 93% in 2024 due to significant incentives and robust charging infrastructure. In contrast, India’s 4W EV penetration stands at only 2%, indicating significant room for growth and the need for urgent policy interventions and infrastructure development.
The Government of India (GoI) has implemented various policies to promote EV adoption, including incentives, subsidies, and regulatory support. The Faster Adoption and Manufacturing of (hybrid and) EVs (FAME) initiative, launched in 2015, has been extended to increase subsidies and reduce the GST rate on EVs. The Production Linked Incentive (PLI) scheme, launched in 2021 under the Make in India initiative, aims to boost the manufacturing of advanced chemistry cell battery storage. Additionally, the Battery Swapping Policy for EVs, introduced in 2022, promotes battery-swapping methods.
The EV ecosystem in India involves multiple stakeholders, including private enterprises, government institutions, auto component suppliers, and OEMs. Companies like Ather, Ola Electric, Tata Motors, BYD, Mahindra Electric, MG, TVS, and Bajaj are actively contributing to the market with their EV products. The charging infrastructure is also developing, with companies establishing charging stations across cities. Financial institutions now offer specialized loans and innovative products for EV purchases, overcoming initial reluctance. Government bodies like the Ministry of Heavy Industries and Public Enterprises, the Department of Science and Technology, and NITI Aayog support ecosystem development.
The Indian mobility ecosystem, valued at USD 651 billion in 2024, is projected to grow at an annual rate of 12% to reach USD 1,257 billion by 2030. Electric mobility currently has a 5% penetration, valued at USD 34 billion, and is expected to grow fourfold to 20% by 2030, creating a USD 238 billion opportunity. Despite the challenges, the imperative to embrace electric mobility in India is clear. The transition to EVs is essential for reducing GHG emissions, improving air quality, and ensuring energy security. Collaborative efforts from policymakers, industry stakeholders, and the public are crucial to achieving a cleaner and more sustainable mobility landscape in India. Embracing electric mobility is not just an option; it is a necessity for India’s future.
