EV Adoption in India - Car Buyers Guide

Key Highlights:

• Several Indian state governments offer attractive incentives and tax benefits on EVs.
• The demand for EVs has grown substantially over the years, and the trend does not seem to subside.
• In many ways, especially in cities, an EV is the wisest decision to make.

Growth of EV Adoption in India

In the past few years, India has witnessed a significant rise in EV sales, particularly in urban areas. This growth was driven by increasing awareness of the long-term cost savings of EVs, improved battery technology and growing availability of electric models across multiple price segments.

The growth in adoption is also evident in the commercial segment, where electric auto-richshaws and e-buses are increasingly used for last-mile transport and public transport, respectively. However, this shift is still in its early stages compared to developed countries.

Government Initiatives Supporting EV Growth

The Indian government has introduced several steps to boost EV adoption. The ‘Faster Adoption and Manufacturing of Electric Vehicles’ or FAME scheme is perhaps the most important one among these. Currently in its second phase, the FAME II scheme provides subsidies for electric two-wheelers, three-wheelers and electric buses. The amount of subsidy is linked to the battery size and range of the EV.

Several state governments have also launched their own EV policies. These policies include financial support such as registration fee waivers, road tax exemptions and buying incentives. Some states also offer subsidies for setting up charging infrastructure and battery recycling facilities.

In addition, the Central Government has reduced the GST on electric vehicles from 12% to 5%. There are also income tax benefits for EV buyers under Section 80EEB of the Income Tax Act. All these measures help lower the upfront cost of EVs, although an equivalent EV and ICE vehicle still showcase a price disparity.

Challenges Facing EV Adoption

Despite all the progress, electric mobility in India still faces several hurdles. One major challenge is the high upfront cost of EVs. Although the total cost of ownership is lower in the long term, many customers are discouraged by the initial investment.

Limited charging infrastructure is another widely acknowledged challenge. While cities are slowly witnessing an increase in public charging stations, rural areas and highways still lack adequate facilities, creating range anxiety among potential buyers.

Battery technology also remains a bottleneck. Most EVs in India rely on imported lithium-ion cells, which adds to costs and limits control over supply chains (a control that would otherwise be possible through local manufacturing). Battery replacement costs and limited recycling facilities further pose environmental and economic concerns.

There is a lack of skilled manpower within the field of EV servicing and maintenance. However, manufacturers and supplier brands are actively retraining and upskilling technicians to improve their knowledge of electric powertrains significantly.

Consumer awareness should also improve. Many people are still unfamiliar with how EVs work and doubt their reliability. This is slowly changing, yet remains prevalent, especially in smaller towns and rural areas.

Environmental Impact of Electric Vehicles

One of the biggest advantages of electric vehicles is their lower ‘direct’ environmental impact. EVs produce no tailpipe emissions, which means they do not emit carbon or nitrogen oxides into the atmosphere.

Although the production of batteries and the electricity used to charge EVs may involve emissions, at least in a few countries, EVs still have a significantly lower carbon footprint over their lifetime compared to ICE vehicles. As India shifts more of its electricity generation to renewable sources like solar and wind, the environmental benefits of EVs are bound to increase further.

Electric vehicles are also quieter, which reduces noise pollution in urban environments. This leads to improved quality of life in densely populated areas.

Advantages of EVs over ICE vehicles

Electric vehicles showcase several advantages over traditional petrol or diesel-powered vehicles. They have significantly lower running costs. Moreover, electricity is cheaper than petrol or diesel on a per-kilometre basis. EVs also have fewer moving parts and do not require a comprehensive maintenance procedure.

The torque delivery of EVs is instant and linear, making the vehicle more responsive - a boon in city traffic. Several cities are planning to restrict or ban older ICE vehicles (especially diesel vehicles) to improve air quality. Owning an EV ensures future mobility access in such regulated zones.

Another benefit is the potential for integration with smart grids and renewable energy. In the future, vehicle-to-grid technology may enable EVs to supply power back to the grid during periods of peak demand.

The Road Ahead for EVs in India

India’s transition to electric mobility is well underway, but it requires more support from all stakeholders. Manufacturers should invest in and develop more electric models, especially in affordable segments. Governments must expand incentives and invest in public infrastructure to support economic growth. Finally, consumers need more awareness about the benefits of switching to electric.

India has set ambitious targets to curb emissions by 2030. Achieving these goals may help reduce urban pollution, enhance energy security and create a sustainable, eco-friendly transportation system. The journey is challenging but offers massive long-term benefits. However, the first step starts with you: the potential EV buyer.

FAQs

1. Is it wise to buy an EV at the same price point as that of a petrol car?
It would have been a complex answer half a decade ago, but today, the choices of EVs are just as desirable as an equivalent petrol lineup.

2. What benefits can I receive from the government if I buy an EV?
The full extent of benefits varies with state governments, but at the bare minimum, you can expect reduced road taxes and registration fees.

3. What is the least spoken about challenge in owning an EV in India?
Most EV charging stations are privately owned and require their own app and payment gateways to use.