Strategy for electric vehicles in India

Abstract

Over the last few years, India has been one of the fastest growing economies in the world. This growth has led to the emergence of an affluent middle class which in turn has contributed to the significant increase in the demand for automobiles over the years. The energy resources that have fuelled this growth have been primarily fossil fuels. With the country expected to grow at the same rate in the near future, there has been growing concern that continued use of fossil fuels as energy resources would further contribute to global warming and pollution concerns that are prevalent today. Almost all the vehicles in India are powered by the Internal Combustion Engine (ICE), thereby further contributing to this problem. In light of this, the electric vehicle industry is gaining traction with the governments focus shifting on greener vehicles and trying to mitigate the ill effects of fossil fuels. Although the industry is promising, it is faced with tepid growth because of lack of adoption from the consumers front. The Indian automobile industry manufactures close to 25 million vehicles across all categories ranging from two-wheelers to heavy commercial vehiclesi . The automobile industry also helped the allied industries also grow in the process whose market size accounted for nearly US$ 43.5 billion in FY17ii. Both the industries grow together along with the economy. The recent focus on the government towards electric vehicles has prompted Original equipment manufacturers to focus on electric vehicle. Mahindra which ventured into the electric space after the successful acquisition of Reva Electric. Tata motors also ventured into the same space. These are the two prominent stalwarts of the electric vehicle industry India along with startups, which are marching forward in this space in their own way. All the electric vehicle players are trying to develop a one-specific electric vehicle platform over which most of the electric variants can be developed. This report aims to provide insights into the nascent electric vehicle industry in India and to highlight the government's role in this Industry.