Increased EV Penetration to Boost Jobs and Lower Crude Imports in India: CEEW

Increased EV penetration in India could help it save on crude oil imports worth over Rs 1 lakh crore annually and create 120,000 new jobs by 2030

A new study has found that India could save on crude oil imports worth over Rs 1 lakh crore (USD 14 billion) annually if electric vehicles (EVs) were to garner a 30 percent share of India’s new vehicle sales by 2030. This increase in EV penetration could also increase the combined market size of powertrain, battery, and public chargers to over Rs 2 lakh crore (USD 28 billion), in addition to creating 120,000 new jobs in this sector. In addition, a substantial number of new jobs are likely to be created in emerging areas such as battery recycling, telematics, and allied construction and services.

The study which was conducted by the Council on Energy, Environment, and Water (CEEW), supported by the Shakti Sustainable Energy Foundation, also found that beyond the economic benefits meeting the 30 percent EV penetration target in 2030 could lead to several environmental benefits including a 17 percent decrease each in primary particulate matter and nitrogen oxide and dioxide (NOx) emissions, 18 percent reduction in carbon monoxide emissions, and a 4 percent reduction in greenhouse gas emissions relative to the business as usual scenario (BAU).

Abhinav Soman, one of the authors of the study, said, “As India recovers from the pandemic, a focus on developing India’s domestic EV manufacturing sector and increasing the penetration of electric vehicles in road transport would help deliver on jobs, growth and sustainability. This would require creating a robust and comprehensive transition plan for electric mobility that capitalises on the opportunities created in the form of improvement in the balance of payments, new markets, and jobs generated. Further, we strongly recommend that the EV roadmap for India should target a significantly higher share of EV penetration as the 30 percent target could be achieved just via the sales of electric two-wheelers and electric three-wheelers.”

As compared to the BAU, the CEEW study also highlights that 30 percent EV penetration would include trade-offs such as an estimated 19 percent fewer jobs in the oil sector and in the internal combustion engine (ICE) vehicle manufacturing sector combined. Further, the combined annual value add loss in the oil and the automobile sector could amount to about Rs 2 lakh crore. In addition, the central and state governments would lose over Rs 1 lakh crore in tax revenue annually from reduced sales of petrol and diesel.

However, the study then goes on to add that these impacts on the wider economy would be offset through newer avenues for value addition and employment within the EV ecosystem such as battery recycling, construction of Giga factories, installation and operation of EV charging infrastructure, and automotive telematics products and services. Further, the central and state governments must reduce their dependence on revenues linked to petroleum consumption and diversify their revenue pool with increasing EV penetration.

Further, the study highlighted that to realise the full benefits of an EV transition, the rise in private vehicle ownership must be contained via policy interventions and behavioural nudges. An increasing share of passenger travel demand should be met via public transport and non-motorised transport options such as walking and cycling. Such a focus would also have positive implications for air quality, road safety, congestion, and energy consumption.