India's automotive market, fuelled by rapid urbanization and low vehicle penetration, is poised for significant expansion in the coming years and this strong growth could result in India leading in fossil fuel consumption.
In this context, G20 Sherpa Amitabh Kant believes the country needs to ensure that electric vehicle adoption happens in a big way for sustainable and cleaner transportation.
“In India, we have 24 cars per 1,000 people, while in the US there are 1,100 cars and 950 cars in Europe. Now, if India is going by the Western countries, we will be driving fossil fuel consumption. Therefore, what India needs to do in the beginning, as it urbanizes and industrializes, is going for electric mobility in a very big way,” Kant said while speaking at Mercedes-Benz’s Sustainability Dialogue India 2024.
Kant’s comments come at a time when electric vehicle sales globally has started signs of slowing down. India recently surpassed Japan to become the world’s third largest passenger vehicle market in the world. Electric vehicle penetration in India is still in the low-single digits, driven mostly by two-and three-wheelers. The government has set a target of 30% electric vehicle adoption by the end of the decade.
“Almost 68-70% of India’s mobility market is two-wheelers. Two-wheelers, three-wheelers, and four-wheelers are critical, and to my mind, they will be driven by batteries. There are buses and trucks, which are also critical. But there, green hydrogen will be a better option than batteries for long-distance transport,” he said.
Kant noted that the government has supported the early-stage adoption of electric vehicles through policies such as Faster Adoption and Manufacturing of Electric Vehicles (FAME) and production-linked incentive (PLI) schemes as well as reduced taxation to create a differential.
The FAME scheme has been instrumental in driving the early-stage adoption of electric vehicles by providing demand incentives. The third phase of the FAME scheme is set to replace the temporary Electric Mobility Promotion Scheme (EMPS) 2024, which was rolled out in April and expires by the end of September.
“We will come out with FAME 3 to support the transition to what’s green mobility and to ensure that there is charging infrastructure all over the country,” Kant said.
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