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Press Release

Need ZEV penetration to grow at ~380 basis point annually to meet National EV target of 30% by 2030: FICCI-Yes Bank Report

Dec 03, 2024

  • States to renew EV policies till 2030 with aggressive targets and determined implementation

 

  • Mandate EV adoption in public transport and fleet operations

 

 

NEW DELHI, 03 December 2024: As India races toward its net-zero goal, the transition to electric vehicles (EVs) is emerging as a key pillar of the country’s sustainability agenda. A report by FICCI-YES BANK, ‘Driving ZEV Transition – From Center to State,’ has urged the need to double the rate of EV penetration to reach national targets by 2030 and also urges States to renew their EV policies till 2030 and emphasized mandating EV adoption in public transport and fleet operations.

 

While ZEV penetration has grown by ~200 basis points (bps) annually between FY21-24, the report highlights that this growth rate must nearly double to ~380 bps annually to achieve India’s ambitious EV30@30 target—30% EV penetration by 2030, emphasised FICCI-Yes Bank Report.

 

ZEV penetration rose rapidly at ~200bps per year between FY21-24; but needs to nearly double this rate to achieve EV30@30

 

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Further, the report urges states to urgently review and renew their EV policies as their current tenures come to a close, emphasizing the need for aggressive targets and timely implementation to fast-track the country’s transition to Zero Emission Vehicles (ZEVs). Many States’ EV policies are reaching the sunset soon. It is important from the perspective of the investors to provide a stable and long-term policy environment. The report provides a roadmap to bridge the gap between ambition and execution, offering actionable recommendations to drive Zero Emission Vehicle (ZEV) penetration across the country.

 

The report brought out that top 5 states contribute more than half of the EV volumes in FY 24, and the spread of EV sales improved over the past four years. The report sheds light on the pivotal role played by states in India’s EV transition. Delhi emerged as the leader in EV penetration at 11.5%, driven by its multi-segment adoption, followed closely by Kerala (11.1%) and Assam (10.0%), where e2W and e3W adoption have been key. Gujarat, Odisha, Kerala, and Punjab demonstrated the highest CAGR in EV sales from FY21-24, highlighting the need for states to collaborate and cross-pollinate successful interventions.

 

Key Recommendations from the Report

 

Transport sector is a cornerstone of India’s net-zero commitment by 2070. With the Government’s robust push for EV adoption complemented by state-level initiatives, scaling the ZEV transition requires a multi-pronged strategy.

 

The report identifies key areas for intervention:

  1. Demand-Side:
    • Continued fiscal support mechanisms, such as road tax exemptions etc, to align with market dynamics.
    • Mandating EV adoption in public transport (STU buses) and fleet operations (government owned 4W, ULB waste management, aggregators for last mile connectivity & delivery) where feasible can provide significant impetus.

 

  1. Supply-Side Measures:
    • Need to capitalize on localization opportunities, building robust EV value chains, and focus on R&D, sustainability, and skilling as the market matures.
    • Encouraging industry investment in manufacturing and assembly to foster a thriving EV ecosystem is critical.

 

  1. Infrastructure Development:
    • Detailed phase wise planning of charging infrastructure development in 2nd tier and rural areas can be instituted, apart from planning for focus cities and highways with a 5 year implementation roadmap.
    • Ensuring Uptime for Installed Chargers: Continuous monitoring and upkeep of installed EV chargers is required. Repair alerts may be generated when a charger becomes non-operational.
  2. Policy Review/Renew and Impact Measurement:
    • As State EV Policy periods come to a close, and initial green shoots start to allow some learnings from the policy impetus thus far, there is an opportunity for all states to review/renew EV policies till 2030 with aggressive targets and determined implementation
    • Time-bound quantifiable goals/ milestones with regular progress reviews will enable policymakers to aim high, assess the impact of policies and make timely adjustments

 

  1. Institutional Support and Awareness Building:
    • Dedicated inter-departmental EV cell/central coordination/ steering agency can ensure that policies are implemented consistently and effectively.
    • Awareness campaigns targeting consumers for demand generation and awareness generation esp. in small towns/ rural areas

 

The report highlights the need for states to support industry development and charging infrastructure through sustainable fiscal measures, well-defined institutional mechanisms, and focused policies. It underscores the importance of a collaborative approach between the central and state governments to accelerate ZEV adoption.