India’s automobile manufacturing sector, a key part of the country’s economy and employment, is now focusing on reducing emissions to support India’s climate goals. A recent report by the Council on Energy, Environment and Water (CEEW) explores how the sector can reach net-zero emissions by 2050, which is 20 years ahead of India’s national goal of 2070. This shift is especially important as vehicles produce most of their emissions—around 65 to 80 percent—during their use phase.
One of the main steps suggested is electrifying vehicles, with hybrid vehicles serving as a temporary bridge. This change means Indian vehicle manufacturers, known as Original Equipment Manufacturers (OEMs), must start producing more low-emission vehicles. In addition to changing what they build, they also need to make their factories and supply chains cleaner.
CEEW’s study used the Global Change Analysis Model to predict future energy needs and emissions for the Indian auto sector. The study looked at both direct emissions from OEMs (Scopes 1 and 2) and indirect emissions (Scope 3), which include parts and materials like steel and rubber. In 2020, steel production was the biggest source of emissions because it depends heavily on coal.
If the industry continues business as usual, vehicle production is expected to grow 3.7 times between 2020 and 2050, reaching over 96 million units per year. This growth would cause emissions from manufacturing and suppliers to more than double, from 30.3 million tons of CO2 in 2020 to around 64 million tons by 2050. About 70 percent of these emissions would come from materials, mainly steel.
The report outlines a “Net-Zero scenario” where both OEMs and suppliers aim for net-zero by 2050. In this future, electricity would make up 99 percent of the energy used by OEMs, and steel producers would shift from coal to hydrogen, which would supply about 56 percent of their energy. Coal use would drop to under 10 percent. These changes could cut emissions to just 9 million tons by 2050, but they might also raise electricity and material costs.
Another scenario, called the “Alternate Net-Zero scenario,” assumes only the OEMs go net-zero by 2050 while suppliers follow the national 2070 goal. This would reduce emissions to 37 million tons, better than the business-as-usual path but not as effective as the full net-zero scenario. The continued use of coal by suppliers in this case shows the importance of aligning emission targets across the supply chain.
To meet these goals, the report recommends using green electricity through Power Purchase Agreements or on-site renewable systems, working with suppliers to cut emissions, and using more recycled steel. Buying low-carbon steel through special agreements and using carbon offsets for remaining emissions are also key steps. Battery emissions should be reduced by recycling. The report concludes that India’s auto sector can support national and global climate goals by adopting these strong decarbonisation measures.
