Realizing India’s EV potential is not without its challenges. The journey towards widespread EV adoption in India is slow and plagued with hurdles to overcome. In the following sections, we examine the key challenges hindering EV adoption in India. We also explore possible solutions that can help the country overcome these obstacles to enable a faster, more efficient country-wide adoption of EVs.
Multiple players are also partnering with businesses and government agencies to build innovative solutions that positively impact the EV industry, leveraging India’s qualified talent pool. According to Nitin Gadkari, the Union Minister of Road Transport and Highways, the EV industry is likely to create five crore new jobs, and India’s young talent pool is well-poised to ride this job growth.
Despite these many opportunities, the country still has to address significant challenges before reaching full adoption of electric vehicles.
India’s electrification will be beneficial for many different sectors, but the country’s path won’t be very smooth. Source: Weforum.org
The Challenges for India
Realizing India’s EV potential is not without its challenges. The journey towards widespread EV adoption in India is slow and plagued with hurdles to overcome. In the following sections, we examine the key challenges hindering EV adoption in India. We also explore possible solutions that can help the country overcome these obstacles to enable a faster, more efficient country-wide adoption of EVs.
1. Lack of Clean Energy
Much of India’s electricity is generated from burning coal. That said, relying on coal to generate power for all the EVs would defeat the purpose of reducing carbon emissions through EV adoption. That’s why India is exploring other energy generation sources, like solar, wind, and nuclear energy, as mentioned in Nitin Gadkari’s speech in the 7th edition of the ETAuto EV Conclave. The government is also actively pursuing research and development in the areas of biofuel to power EV manufacturing units.
These measures from the Indian government provide trust and opportunities for private players to leverage innovation and technology to build EVs faster and at a lower cost. In turn, this will bring down upfront costs for end-users, thereby leading to greater adoption of electric vehicles in India.
2. Underdeveloped Charging Infrastructure
Infrastructural issues stand against India’s quest for full EV adoption. EVs require different charging and maintenance infrastructure than traditional ICE vehicles because of the differences in engine and other working parts. But India’s current charging infrastructure may not be enough to handle the increased demand for EVs.
At the time of writing this piece, India has 934 charging stations, most of which are located in urban areas. In comparison, China had 1.8 million electric charging stations as of 2022. Building bigger batteries and fast-charging stations will mean investing in high-speed, commercial-grade chargers. This, however, requires significant capital investment.
The government is working with private players to boost the presence of charging stations. The Ministry of Power is providing a slew of financial and non-financial incentives to build EV charging stations. For example, the ministry is adopting a revenue-sharing model for land use and setting affordable charging rates for both operators and users.
In addition, private entities in the sector are working with municipal, state, and central entities to help install EV stations and charging points. They are also collaborating with operators to create a Charger Management System (CMS) to monitor the operations of these stations and streamlining the entire charging process.
3. Suboptimal Battery Technology
An EV’s driving range is limited, making it difficult for drivers to travel long distances without recharging. Besides limited charging stations, battery capacity, aerodynamic drag, and vehicle weight also compound the problem. This is because current batteries are small, and have low voltage capacities, so they aren’t enough to increase EV propulsion and travel longer distances.
To address this problem, private players must innovate to create batteries made of lightweight materials, with higher energy density, and that use renewable sources for charging. The government is providing the necessary impetus in the form of tax credits.
The national government is also promoting the manufacturing of batteries in India with the National Mission for Transformative Mobility and Battery Storage, 2019. It is also providing companies with the technical know-how and business environment to improve the battery technology for EVs.
4. Persistent Resistance to Change
Indian consumers are still resisting the adoption of EVs, despite their long-term economical and environmental benefits. This stems from a lack of awareness of EVs and a general reluctance to embrace new technologies, especially in rural areas.
But players in the Indian market must come together to address consumers’ concerns. They should also build a supportive ecosystem to promote the widespread adoption of EVs in India. This can be done through the development of more affordable EVs, the expansion of charging infrastructure, and the creation of awareness and education programs to educate consumers about the benefits of switching to EVs.
What Can India Learn from Other Countries’ Success?
Power, infrastructure, and financing all are primary antagonists in India’s EV adoption story. But the country can take cues from others already making inroads towards full EV adoption. The countries leading global EV adoption paint an interesting picture.
India can learn from other countries’ successes and mistakes. Source: acea.auto
The top countries in the graph above are all wealthy countries in northern Europe. Combined, they don’t even represent 3% of India’s population. This may lead us to believe that their success will be impossible to replicate in a much more diverse and densely-populated country, like India.
However, China comes in second and turns that argument on its head. Let’s delve into what different regions have done for EV adoption and what India can learn from these efforts.
The EU, EFTA, & UK
In 2021, electric car registrations in the EU-27 region was 1,729,000, up from 1,061,000 in 2020, representing a 17.8% increase. All EU countries, including Norway, which has the highest number of registrations in a year, offered financial incentives like tax reductions and exemptions.
India is also offering tax incentives along the same lines. And with favorable government policies and the presence of first-mover companies, the country will be able to improve the adoption of EVs in the next three to five years.
China
According to the China Association of Automobile Manufacturers (CAAM), China sold 6.89 million EVs in 2022 alone. It also boasts the largest electric car fleet in the world: 4.6 million + electric cars on roads in China. This success story is attributed to generous government support as well as intense domestic competition, both of which fueled innovation and reduced car prices.
In comparison, India is also offering support, but the domestic market is not robust and competitive yet. But that is expected to change in the coming years as the impact of the current policies becomes more widespread. In the meantime, the government must continue to encourage innovation and investments.
The USA
EV car sales in the US represent 5.8% of all vehicles sold, up from 3.2% a year ago. However, the overall sales fell by 8% in 2022 when compared to 2021. Experts believe that stricter requirements for claiming federal incentives, high car prices, and concerns about raw materials for batteries were the cause of the decline. That said, the EV car industry is still huge in the US, and it grew due to government investments and policies. Innovation by leading players like GM and Tesla also added to the appeal.
In comparison, the Indian government is significantly pushing towards greater adoption of EVs, with incentives and investments. However, it must enhance the pace of innovation and technical expertise. To do that, the government should create more educational centers of excellence. It must also stop federal funding in a phased manner after considering the macroeconomic factors.
With the right mix of policies, awareness, investments, infrastructure, and technology, India will certainly take key lessons from these countries to drive full EV adoption.
Smart Digital Solutions Will Be A Key Driver for India’s EV Ecosystem
The future of electric vehicles in India holds great promise and is poised for significant growth in the coming years. With supportive government policies, increasing consumer awareness, and advancements in EV technology, the country is well-positioned to embrace this shift toward sustainable transportation.
The increasing demand for EVs is also leading to an expansion of charging infrastructure and the development of locally produced battery technologies. The automotive industry in India is also poised to play a major role in the global shift towards EVs, with the country having the potential to become a leader in this space.
Private companies play a critical role in offering smart digital solutions that will contribute to infrastructure development while acting as a bridge between government agencies and end-users. Initiatives from these companies will help fleet operators make the shift to EVs and OEMs to provide seamless driving experiences to their customers.
Collaboration with local governments will also help expedite the construction of charging stations, along with creating greater awareness among Indian customers. This will contribute to the rapid growth of the EV industry.
It is therefore up to both the public and private sectors to continue working together to make India’s ambitious goals a reality. The right combination of innovation and investment has the potential to accelerate the adoption of electric vehicles in India, transforming the country’s transportation landscape and contributing to a cleaner, greener future.
For more information about the future of electric vehicles in India, please see the FAQ and Resources sections below.