State EV policies key in success of battery-powered mobility in India: Report

The electric vehicle revolution in India is afoot and the charge is being led by two-wheelers and three-wheelers. And while the movement in the passenger vehicle has been rather cautious, there is a shift at play here as well which augers well for the future of electric mobility in India. A recent report published by KPMG and CII has now highlighted the role that state EV policies could also play in promoting EV adoption in the country.

Highlighting how state government can provide impetus to sale of EVs as against conventional vehicles with internal combustion engines, the report titled 'Shifting gears: the evolvoing electric vehicle landscape in India' notes that people at large need to be given reasons to switch to battery power through a number of ways. The report recommends that hiking road tax/registration fees on conventional vehicles, surcharge on parking of such vehicles and de-registering them could sway people towards EVs. It further notes that setting up of charging infrastructure as well as taking out vehicle scrappage policy - currently pending approval from central government stakeholders - could also massively boost EV adoption. "A widespread network of charging stations is vital for ensuring the fast adoption of EVs," states Rohan Rao, Partner – Industrials and Automotive, KPMG in India.

Currently, states including Delhi, Gujarat and Telangana have a firm EV policy in place with others expected to follow. The KPMG-CII report emphasizes that such EV policies ought to have set targets for conversions of EVs and underscores how Delhi, Uttarakhand and Tamil Nadu have such targets in place already.

(Related read: Delhi poised to be the nerve center of India's electric vehicle revolution)

For now and the foreseeable future though, the EV path India is on will most likely be paved by two and three-wheelers. KPMG in India expects 25% to 35% electric two-wheeler penetration, and 65% to 75% in electric three-wheelers by 2030 with passenger vehicle electrification following. "To drive EV adoption, Original Equipment Manufacturers (OEMs) and the government, both at state and central levels, need to work collaboratively towards an integrated policy, creating a conducive ecosystem for India’s electric mobility vision," the report notes.

India is the fourth largest auto market in the world and some estimates suggest there are close to 170 active investors in EV startup ecosystem in the country. And while the government targets 30% penetration of EVs in the automobile sales, this is largely expected to be powered by e-two-wheelers and e-three-wheelers, not PVs. A recent report taken out by Data Labs which also relied on data from Niti Aayog, highlighted that the share of electric passenger vehicles in the entire Indian EV ecosystem in 2019 was a mere 0.5% and that by 2030, such electrified passenger vehicles are likely to form 5.8% of all passenger vehicles sold in the country. When compared to present statistics and how and the rate at which EVs are growing in numbers in European countries, the intent seems right even if the pace seems rather slow.