Key policies include the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) programs, which provide subsidies for charging infrastructure and reduce the Goods and Services Tax (GST) on electric vehicles from 18% to 5%. The Phased Manufacturing Plan (PMP) and the National E-Mobility Program 2020 aim to support domestic manufacturing and set a target of 30% electric vehicles by 2030. The Production Linked Incentive (PLI) scheme was launched in 2021 to reduce costs for advanced battery technologies, and a draft Battery Swapping Policy was issued in 2022 to encourage battery swapping. These efforts are part of a broader commitment to building a robust EV ecosystem in India.
The EV ecosystem in India includes a variety of stakeholders, such as auto component suppliers, new-age electric two-wheeler companies, established automakers, charging infrastructure companies, and financial institutions offering specialized loans and financing options. Key government bodies involved include the Ministry of Heavy Industries and Public Enterprises, the Department of Science and Technology, and NITI Aayog.
The mobility sector in India, valued at USD 651 billion in FY24, is expected to grow to USD 1,257 billion by FY30. Electric mobility penetration is currently at 5% but is expected to grow significantly, reaching around 20% by FY30. The electric mobility market is projected to become a USD 238 billion opportunity by FY30, growing at a rate of 38% annually. In FY24, the mobility product market was valued at USD 200 billion, with electric mobility products accounting for USD 8 billion. The penetration of electric vehicles in the two-wheeler segment is 8%, while four-wheeler penetration is 3%. Commercial vehicles, especially electric three-wheelers and buses, have seen higher penetration rates. The opportunity in electric mobility products is expected to grow to USD 94 billion by FY30.
Despite the promising outlook, challenges remain, including high upfront costs, limited EV options, and the need for standardized charging infrastructure. Government support and continued investment in the EV ecosystem will be crucial for achieving electrification targets and addressing these challenges.
