India@2047: Electric Mobility

FICCI’s Electric Vehicle Committee and YES BANK, establishes a vision for e-mobility in India for 2047, and an accelerated road-map to achieve the same. It identifies key aspirations the sector has potential to achieve over the next 25 years – from market development (87% xEV penetration in new vehicle sales), to local industry development (where >85% of the xEV value chain can be localized), and being a key pillar towards India’s net zero goals.

The report identifies opportunities offered by a >20 mn domestic vehicle market, and the global shift towards electrification, supported by tailwinds such as tightening emission norms (CAFEII, RDE, BS6.2), central & state incentives on vehicle purchase, demand aggregation, and growth of the TCO attractive fleet segment. It recognizes local industry developing due to need of products made for the Indian drive cycle, schemes such as PLI and localization norms for demand incentives. It further notes technology partnerships with advanced markets and starting of R&D focus, especially in the emerging PE/VC funded startup ecosystem. 

However, the report also finds several challenges that remain to be fully tackled: ranging from high upfront cost & constraints on vehicle finance, safety concerns, nascent global inroads; to limited access to key raw materials, R&D and skillsets combined with low order volumes, rapid tech. evolution; and issues in charging infrastructure development & utilisation. It offers a roadmap of solutions to these issues to achieve the aspirations of the sector, developed through extensive stakeholder consultations. For this, the report identifies milestones to be achieved in the short-, medium- and long-term, especially segments and value chain products/processes to be focused, and suggests actions that firms, the industry and policymakers can undertake over these periods.

For cost alleviation and investment drive, the report suggests demand incentives till significant xEV penetration and emissions-based taxation, while also creating credit pathways for financing xEVs. Development of a vibrant resale market and open data on vehicle performance can also help ease vehicle finance & insurance. Vehicle & component servicing & longer warranties, and expanding quality tests to all vehicle classes, can allay concerns on safety & reliability. The report also suggests mandating charging infrastructure in public parkings, and a greater mandate for electricity utilities for upstream infrastructure creation and green power integration. To tap global markets, the report suggests focusing on 2 & 3 wheelers, tractors and LCVs; and value chain products/processes using India’s material/ mineral strengths – supported by export incentives/promotion & development of test capacity for global standards. 

On the supply side, the report identifies local R&D ecosystem development in priority areas as a key imperative – including for recycling and alternate energy sources including sodium/ hydrogen etc.; along with a structured approach to localization including capital equipment. Companies can explore flexible production and design stage collaboration for components, while increasing R&D investment through small teams and startup collaboration. Policymakers can institute R&D incentives/tax rebates, and create/fund infrastructure for prototyping, testing, pilot plants etc. The report also suggests collaborative focused skill missions with Academia, Start-ups, Skill Councils, & MSMEs; and collaborative procurement at component & material level.
The report thus identifies a host of sustained efforts - combining policy reform; skill-building and capability development; Market making for export, recycling, charging; Agency reform; and Implementation mechanisms ranging from self-adoption, collaboration to state scorecards - for India to reap the benefits of the transition to e-mobility in an accelerated manner.