The Government of India has introduced several policies over the past decade to encourage the adoption of electric vehicles (EVs). Starting in 2013, the government launched the National Electric Mobility Mission Plan (NEMMP), aimed at reducing the country’s reliance on crude oil by promoting electric vehicles. By 2014, a standing committee on energy storage was established by the Ministry of New and Renewable Energy (MNRE), and amendments were made to the Motor Vehicle Act to include regulations for e-rickshaws.
In 2015, the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME I) program was introduced with an initial budget of INR 0.3 billion to support the development of charging infrastructure. This was followed by the establishment of the Technology Platform for Electric Mobility (TPEM) in 2016, which aimed to foster research and development in electric mobility.
The FAME program was extended in 2019 as FAME II, with a significantly increased budget of INR 10 billion for charging infrastructure and a reduction in the Goods and Services Tax (GST) on electric vehicles from 18% to 5%. Additionally, the Phased Manufacturing Plan (PMP) for EVs was introduced to encourage domestic manufacturing. The National E-Mobility Program 2020 was launched to further support the electric mobility ecosystem and set a goal for 30% of all vehicles to be electric by 2030.
By 2020, the National Mission on Transformative Mobility and Battery Storage was introduced, aiming to install EV charging kiosks at around 69,000 petrol stations across India. In 2021, the Production Linked Incentive (PLI) scheme was launched to reduce the costs of advanced chemistry cell batteries. This was followed by revisions to the PMP under FAME II and new guidelines for charging infrastructure in 2022, which aimed to make charging more affordable and accessible at residential and office locations.
In 2023, the government allocated INR 5,172 crore to the FAME II subsidy scheme, which represents 85% of the total budget for the Ministry of Heavy Industries. Additionally, EVs were exempted from permits, and states were advised to waive road taxes.
The FAME initiative has been crucial in supporting EV adoption and charging infrastructure development. Launched in April 2015, FAME I provided initial support and was extended in 2019 with increased subsidies and a reduction in GST to enhance affordability. The Make in India initiative also saw the launch of the PLI scheme in June 2021 to promote the manufacturing of advanced battery technologies.
A draft Battery Swapping Policy was issued in April 2022 to encourage battery swapping as a viable method for powering EVs. These efforts reflect the government’s commitment to building a robust EV ecosystem in India, with continued support being essential to achieve the 30% electrification target by 2030.
The EV ecosystem in India involves a wide range of stakeholders, including private enterprises and government bodies. Auto component suppliers play a key role in producing EV-specific components such as batteries and electric motors. New-age electric two-wheeler companies like Ather and Ola Electric, as well as established automakers such as Tata Motors, BYD, Mahindra Electric, MG, TVS, and Bajaj, are introducing a variety of EV products to the market.
Charging infrastructure companies are working to establish charging stations across cities, while financial institutions now offer specialized loans and innovative financing options like battery subscriptions for EV purchases. Key government bodies involved in the EV ecosystem include the Ministry of Heavy Industries and Public Enterprises, the Department of Science and Technology, and NITI Aayog.
The mobility sector in India is a large, multidimensional ecosystem with significant opportunities. Electric mobility affects not only vehicle manufacturers but also has broader implications for the entire ecosystem, including product and service categories. Product categories include components for OEMs, aftermarket parts, passenger vehicles, commercial vehicles, and charging equipment. Services encompass transportation, logistics, financing, leasing, insurance, EV charging, battery swapping, and aftersales services.
The mobility ecosystem, valued at USD 651 billion in FY24, is expected to grow at an annual rate of 12% to reach approximately USD 1,257 billion by FY30. Electric mobility penetration is currently at 5% but is expected to grow significantly, reaching around 20% by FY30. The electric mobility market is projected to become a USD 238 billion opportunity by FY30, growing at a rate of 38% annually.
In FY24, the mobility product market was valued at USD 200 billion, with electric mobility products accounting for USD 8 billion. The penetration of electric vehicles in the two-wheeler segment is 8%, while four-wheeler penetration is 3%. Commercial vehicles, especially electric three-wheelers and buses, have seen higher penetration rates. The opportunity in electric mobility products is expected to grow to USD 94 billion by FY30, with significant increases in penetration across various vehicle segments.
The services segment of the mobility ecosystem, valued at USD 450 billion in FY24, is projected to grow to USD 850 billion by FY30. Electric mobility services are expected to increase their share, with battery charging and swapping services growing rapidly. Despite the promising outlook, challenges remain, including high upfront costs, limited EV options, and the need for standardized charging infrastructure. Government support and continued investment in the EV ecosystem will be crucial for achieving electrification targets and addressing these challenges.
