Driving Electric Mobility in India

• 29 Mar 2025

This editorial is based on “ Going electric: On India and the electric vehicle space” which was published in The Hindu on 27/03/2025. The article brings into picture the import duty exemption on key EV battery components, boosting domestic manufacturing

For Prelims:  Electric mobility, 'Make in India',  EV deployment, Electric Mobility Promotion Scheme, PM E-DRIVE scheme, FAME II, PM Gati Shakti , Government e-Marketplace.  

For Mains: Recent Advancements in India's Electric Vehicle Sector, Key Issues Associated with EV Adoption in India. 

India's recent move to exempt import duties on critical EV battery components signals a strategic pivot towards domestic electric vehicle manufacturing and clean technology adoption. Despite EVs constituting only 2% of passenger car sales in 2024, the country has shown promising momentum in electric two-wheelers. To truly revolutionize its transportation sector, India must not only leverage favorable trade policies but also invest substantially in research, development, and integration into the global battery value chain, transforming from a technology importer to a competitive manufacturer

What are the Recent Advancements in India's Electric Vehicle Sector? 

• Surge in EV Adoption and Consumer Interest: India is witnessing an exponential surge in EV adoption, driven by supportive policies, rising environmental awareness, and improved product availability.  
  • The growing preference for electric mobility is evident across both urban and rural consumers, signaling a behavioural shift. This reflects not just an environmental drive but also rising confidence in EV technology and affordability. 
  • EV sales in India grew by 49.25% in 2023, reaching 1.52 million units. In May 2024 alone, sales rose 20.88% year-on-year to 1.39 million units. 
• Private and Commercial Segment Electrification Targets: Government’s sector-wise EV penetration targets reflect a structured roadmap for both private and commercial vehicles, showing strategic intent across segments.  
  • These ambitious targets align with India’s net-zero and energy transition commitments, while incentivizing industry innovation. The push also ensures sectoral balance in demand creation. 
  • By 2030, India targets 30% EV sales in private cars, 70% in commercial vehicles, 40% in buses, and 80% in two- and three-wheelers, aiming for 80 million EVs. 
• Battery Manufacturing and Component Localization: India has made clear strides toward localising EV battery production, reducing import dependence and strengthening strategic supply chains.  
  • The budget’s customs duty exemption on battery-related capital goods encourages domestic manufacturing. This aligns with 'Make in India' and improves economic competitiveness in the EV space. 
  • The Indian EV battery market is projected to grow from US$ 16.77 billion in 2023 to US$ 27.70 billion by 2028.  
• Rising Investments by Domestic and Global Players: The EV sector has become a magnet for both Indian conglomerates and foreign firms, boosting innovation and job creation.  
  • These investments signal market maturity and potential for long-term growth. Capital inflow also supports ecosystem development—R&D, manufacturing, and charging networks. 
  • Tata Motors-JLR (US$ 1.07 billion), VinFast (US$ 2 billion), and Stellantis (US$ 238.7 million) are among key 2024 investments. Ather Energy raised Rs. 600 crore, becoming a unicorn. 
• State-Level Push for EV Ecosystem Development: States are innovating with their own EV policies and targets, creating a competitive and decentralised approach to EV adoption.  
  • These efforts complement national goals and cater to regional mobility needs. State support also accelerates infrastructure, registration, and EV ecosystem incentives. 
  • Maharashtra targets 10% EV share in new registrations by Dec 2025; Karnataka aims for 100% electrification of cargo 3W/4W by 2030.  
• Charging Infrastructure Expansion and Innovation: Robust EV infrastructure is critical, and India is rapidly scaling up its charging networks, including ultra-fast and battery-swapping models. Partnerships between OEMs, PSUs, and energy firms are pivotal in ensuring EV convenience and last-mile viability. 
  • As of Feb 2024, India has 12,146 public charging stations. Hyundai expanded fast charging across six metro cities and highways. 
• Financing Ecosystem and Affordability Push: A healthy EV finance ecosystem is evolving with NBFCs and dedicated platforms, improving affordability and accelerating adoption.  
  • Financing mechanisms are crucial for scaling small EVs and commercial fleet conversions, especially for MSMEs and last-mile users. 
  • EV financing in India is projected to reach US$ 50 billion (Rs. 3.7 lakh crore) by 2030. Macquarie Group launched 'Vertelo' platform in June 2024 to support EV financing and fleet management. 
• Green Defence and Institutional EV Use: The adoption of EVs by defence and institutional bodies signals credibility and early-stage trust in clean mobility. It also helps in awareness, pilot-scale innovations, and green energy integration within official fleets. 
  • Indian Army announced phased EV deployment at peace stations in Feb 2024. IOC launched its first EV battery swapping station in Kolkata in Dec 2023 in collaboration with Sun Mobility. 

What are the Key Issues Associated with EV Adoption in India? 

• Inadequate Charging Infrastructure and Interoperability Issues: The slow rollout of public charging stations remains a major roadblock, especially in tier-2 and tier-3 cities. 
  • Additionally, lack of standardisation across chargers and connectors causes fragmentation and user inconvenience. Interoperability and access parity are essential for building confidence among consumers. 
  • As of February 2024, India has only 12,146 public EV charging stations. CII estimates that to achieve a ratio of 1:40 charging infra to EVs, India will need to install more than 400,000 chargers annually with a total of 1.32 million chargers till 2030. 
• High Upfront Cost and Limited Financing Access: Despite falling battery prices, the initial cost of EVs remains higher than their ICE counterparts. 
  • Inadequate consumer financing options further restrict access, especially for informal sector buyers. This cost challenge persists despite long-term savings in fuel and maintenance. 
  • And due to high upfront cost as well as limited charging infrastructure, ICRA expects electric vehicle penetration to remain low (3-5%) till 2025 
• Supply Chain Dependence and Battery Raw Material Vulnerability: India remains heavily reliant on global supply chains for critical raw materials like lithium, cobalt, and nickel.  
  • This raises vulnerabilities due to geopolitical tensions, import costs, and lack of domestic reserves. Strategic autonomy in battery production is yet to be fully realised. 
    • For instance, India imported 70% of its lithium-ion cells in 2023.  
• Disparities in State-Level EV Ecosystem Development: While some states like Delhi, Maharashtra, and Karnataka lead in EV policy and infrastructure, others lag behind in planning and execution.  
  • The absence of a uniform nationwide EV strategy causes uneven adoption and slows down the creation of a national market. 
  • Goa leads in EV penetration at 14.2%, while many large states like Uttar Pradesh have sub-5% adoption.  
    • Maharashtra targets 10% EV share in new registrations by Dec 2025; many others have no clear targets. 
• Incomplete Domestic Manufacturing and Innovation Ecosystem: India’s EV manufacturing ecosystem still relies on significant imports of components, with limited domestic R&D in advanced technologies.  
  • This hampers value addition, affects job creation potential, and exposes the sector to global supply shocks. Indigenous innovation is growing but not yet mature. 
  • Budget 2025-26 proposes to fully exempt Basic Customs Duty on cobalt powder and waste, the scrap of lithium-ion battery, Lead, Zinc and 12 more critical minerals, signalling need for domestic capacity.  
• Low Consumer Awareness and Range Anxiety: A large section of potential EV buyers lacks understanding of EV benefits, total cost of ownership, and maintenance models.  
  • Concerns over vehicle range, battery life, and lack of nearby service centres persist, especially outside metros. This perception gap deters first-time adopters. 
  • According to a recent survey, 83% of Indian consumers are open to NEVs by 2030, but only a small fraction understands charging tech and subsidy schemes fully. Rural adoption remains nascent. 
• Policy Volatility and Uncertain Subsidy Continuity: Frequent changes and lack of clarity around central and state subsidies, GST rates, and registration benefits make investors and buyers hesitant.  
  • The phase-wise uncertainty around FAME II and transition to newer schemes like the Electric Mobility Promotion Scheme creates confusion. 
  • FAME II (US$ 1.43 billion) ends in March 2024; the PM E-DRIVE scheme has replaced it. Industry demands a long-term incentive framework to ensure business continuity. 

What Measures can India Adopt for Enhancing EV Adoption? 

• Develop a Unified National EV Charging Infrastructure Mission: India must establish a single-window EV Charging Infrastructure Mission to standardise charger types, enable interoperability, and ensure equitable deployment across urban and rural areas. 
  • This mission should involve coordination between state DISCOMs, ULBs, and private players. A push for smart-grid-enabled charging with renewable energy integration is critical. 
  • A common public data portal for real-time availability and uptime of stations can enhance consumer trust. 
• Rationalise and Stabilise EV Subsidy Architecture: India needs a long-term, stable subsidy framework under a revamped FAME III that synchronises with state-level EV policies.  
  • This should adopt a demand-linked dynamic incentive model and phase-wise tapering based on market maturity.  
  • Linking this with the Electric Mobility Promotion Scheme ensures smoother transitions. Stability in policy timelines boosts investor and consumer confidence. 
• Prioritise Domestic Battery Manufacturing under PLI 2.0: An enhanced PLI scheme focused specifically on advanced battery chemistries, solid-state storage, and battery recycling ecosystems can future-proof India's EV value chain.  
  • It should prioritise circular economy models and incentivise deep-tech R&D. Strengthening this under the ‘Atmanirbhar Bharat’ framework ensures long-term resilience in strategic materials and cell-to-pack innovation. 
• Integrate EV Mobility with Smart Cities and PM Gati Shakti: EV planning should be embedded into Smart Cities Mission and logistics planning under PM Gati Shakti for seamless urban mobility and green freight corridors.  
  • EV-ready zones, battery swapping hubs, and green parking infrastructure can be co-developed.  
  • This integrated planning approach reduces duplication and enables effective fund convergence. 
• Launch Targeted EV Financing Schemes for MSMEs and Informal Sector: Special credit guarantee and interest subvention schemes must be created for small fleet operators, gig workers, and MSMEs to adopt EVs for commercial use.  
  • A dedicated NBFC-led green financing platform like ‘Vertelo’ should be expanded with central support.  
  • Priority lending tag for EVs under RBI guidelines would further boost institutional funding. 
• Mandate EV Inclusion in Government and PSU Procurement: All government departments, PSUs, and defence establishments should adopt a minimum 30% EV fleet replacement mandate within a set time frame.  
  • This will catalyse volumes, set examples, and create demand visibility. Linking this with the Government e-Marketplace (GeM) ensures procedural ease and price discovery. 
• Strengthen Skill Development under Skill India + EV Industry Partnerships: A tailored EV workforce strategy must be implemented under the Skill India Mission in collaboration with EV startups and auto giants.  
  • Courses on battery maintenance, charger servicing, BMS (battery management systems), and EV software diagnostics should be launched across ITIs. This enhances employability and supports industry readiness. 
• Promote Local Innovation through Startup India + FAME Synergy: A cross-scheme synergy should be created where startups solving EV-related issues, thermal management, AI-based energy routing, or rural EV charging—are fast-tracked for incentives under both FAME and Startup India. 
  •  This encourages frugal innovation and localisation of advanced components and software layers. 
• Establish a National EV Awareness and Behavioural Shift Campaign: A large-scale national campaign like "Har Ghar EV, Har Rasta Green" can be launched using mass media, schools, and community-based events.  
  • This should demystify range anxiety, charging myths, cost comparisons, and highlight successful users. Citizen-centric outreach bridges the perception gap in tier-2/3 markets. 

Conclusion:

India’s electric vehicle sector is at a pivotal juncture, driven by policy support, rising investments, and growing consumer acceptance. While significant strides have been made in manufacturing, infrastructure, and financing, challenges like charging gaps, supply chain dependencies, and cost barriers remain. By integrating EV adoption with broader sustainability goals, India can transition from an emerging market to a global leader in clean mobility. 

Drishti Mains Question:

Analyze the recent advancements and challenges in India's electric vehicle (EV) sector. How can policy interventions, domestic manufacturing, and infrastructure development accelerate EV adoption while ensuring long-term sustainability? 

UPSC Civil Services Examination, Previous Year Questions (PYQs)  

Mains

Q. How is efficient and affordable urban mass transport key to the rapid economic development in India? (2019)