India Could Become the Largest EV Market in the World: Report

A new report has revealed that India has the potential to become one of the largest EV markets in the world

A new report has revealed that, India has the potential to become one of the largest electric vehicles (EV) markets in the world, with the government pushing for the segment in order to curb pollution and reduce reliance on import-dependent fossil fuel.

However, the uptake of EVs has been slow due to the high upfront and lifecycle costs, but a long-term investment in research and development (R&D) will create sustained growth, according to the report by the World Economic Forum and Ola Mobility Institute.

“Apart from investment, government backing and direction will be crucial for accelerating adoption and deployment of electric mobility,” it added.

The report said there are 10 states and Union Territories (UTs) that are leading the way in building production, infrastructure and services to increase the momentum of EV usage in India. These states and UTs are Andhra Pradesh, Bihar, Delhi, Karnataka, Kerala, Maharashtra, Tamil Nadu, Telangana, Uttarakhand and Uttar Pradesh.

“Considering the strong governmental push towards EVs, India has a huge potential to become one of the largest EV markets,” the report noted.

The report, which also highlights the opportunities for the sector, analysed three value chains — production, infrastructure and services — of these states, and found that most of them emphasised on the production of the EV value chain, aspiring to be manufacturing hubs for such vehicles and their components.

In the infrastructure value chain, provisions for the installation of charging infrastructure in public and private places were made by most states to address range anxiety.

“Fuelled by the national agenda of electrification, and bolstered by government-led initiatives, the public and private sectors alike have commenced their respective and joint transitions to electric mobility. But, the uptake of EVs has been slow reflecting their high upfront and lifecycle costs. To overcome these challenges, funding is required for research centres and centres of excellence, which in turn, would boost overall R&D in the sector and subsequently manufacturing. Reflecting the nascent nature of the market, government backing and direction is crucial for accelerating adoption and deployment of electric mobility,” the report said.

Christoph Wolff, head of mobility, World Economic Forum, said, “For a price-sensitive market like India, developing incentives for electric (clean) kilometres run versus electric vehicles purchased makes economic sense and is suggested to be the guiding principle for the national strategy.”

Given India’s role as part of the global big four automotive players (alongside China, Japan and the US), the report said large-scale changes to the Indian market would affect the industry’s global footprint.