According to the Lawrence Berkeley National Lab, achieving a clean energy transition necessitates a significant overhaul of our energy mix, including a 30-fold increase in solar, onshore and offshore wind capacity from current levels.
It’s critical to transform the transportation sector to reduce oil dependence, given that road transport accounts for 50% of crude oil imports. Full electrification of road transport by 2030 could yield savings of up to $10 bn by 2030, and more than $80 bn by 2050.
Although EV adoption is accelerating, it remains slower compared to other major markets. About 5 mn EVs were sold globally in Q4 2024, with China leading with a 60% share, followed by Europe at 25% and the US at 10%. In contrast, India lags at 1%, with EVs accounting for only 5% of vehicle sales in FY24.
There’s a need to develop a new strategy that can help accelerate the EV transition by 2030. This transition should focus on electrifying India’s 50 most polluted cities by 2030. eFy Electrify 2-wheelers, 3-wheelers, LMVs and buses, as they are key contributors to tailpipe emissions. These 50 cities account for over 40% of India’s vehicle registrations. If these cities can achieve 100% electrification in new vehicle sales by 2030, India will be well on its way to sharply reducing its oil needs.EV market, valued at $5.61 bn in 2023, is expected to reach $50 bn by 2030, potentially generating at least 5 mn direct and 50 mn indirect jobs.Technological advances have lowered costs for batteries and EV tech. OEMs have invested over $6 bn in EV tech and manufacturing plants, introducing more than 200 e-2/3-wheeler models. Battery manufacturers aim to achieve a 50 GWh capacity by 2030. Startups in this sector have surged from 15 in 2012 to 1,883 in 2023. These trends indicate that the supply side will be prepared to meet ambitious electrification targets if demand remains clear.
Phase out the old Within the next 24 months, these 50 cities should retire, or retrofit, old ICE vehicles. In Delhi, this could create demand for 2 mn EVs. Also, stringent pollution checks and penalties for polluting vehicles should be enforced, and taxes levied on commercial ICE vehicles to incentivise cleaner alternatives. States must mandate zero-emission vehicles for all new registrations of autos, LCVs, taxis and last-mile delivery vehicles over the next two years.
Reduce prices Promoting bulk procurement tenders drives down prices. Focusing on electrifying school buses, private buses, airport taxis, autorickshaws and 2-wheelers for government and institutional employees can accelerate price reductions. Mandating full electrification of government fleet will stimulate strong EV demand and establish a replicable model for the private and industrial sectors, delivering financial benefits for the exchequer.
Incentivise Fiscal incentives will be crucial for purchasing new EVs and retrofitting existing vehicles. Extending FAME and state EV policies with predictability and consistency for the next five years, along with providing concessional finance and creating innovative risk-sharing instruments, will support this transition. Financial institutions must introduce EV financing schemes, offering favourable rates to NBFCs and leveraging partnerships with philanthropic foundations and multilateral development banks to mitigate risks.
This transition presents India with an opportunity to emerge as a global leader in manufacturing new-age EVs. With the right signals in the forthcoming Union budget, increased domestic demand will enhance industry readiness, attract investments and advance technology, paving the way for entry into export markets and positioning India as an EV export hub globally.
The ripple effects of this shift will profoundly impact our environment, economy and society, reshaping the future of global transportation. Ultimately, this transformation will significantly reduce pollution levels, and enhance the well- being of millions.