India currently faces an unprecedented air quality challenge that directly impacts our health:
- Road transport contributes 20-30% of urban air pollution
- In North India, a striking 50% of lung cancer patients are non-smokers
- In Delhi, breathing the air is equivalent to smoking ~2,372 cigarettes annually
Ridership of Delhi metro is now touching its all-time high with more and more people opting for this cleaner mode of transport. However, for others who prefer to travel in their vehicle either due to connectivity issue or others, what is the answer? Let's talk about other key technology under adoption globally to decarbonize road transport, i.e., the shift to electric vehicles.
What is an Electric Vehicle (EV)?
Similar to regular vehicles in terms of function, they run on electricity. You charge them, and they're quieter and don't produce smoke when you are driving them.
Then, how do EVs work?
- Battery: This is the rechargeable energy pack that powers the vehicle.
- Electric Motor: Instead of a traditional engine, electric vehicles (EVs) are equipped with an electric motor. This motor uses electricity from the battery to drive the wheels.
- Charging/Fuelling: To power up an EV, you charge it similarly to how you would charge your phone. A special plug connects to an electric outlet or a charging station.
Types of EVs*
There are four types of electric vehicles (EVs) available:
- Battery Electric Vehicle (BEV): Fully powered by electricity.
- Hybrid Electric Vehicle:
- Hybrid Electric Vehicle (HEV): The vehicle uses an internal combustion (usually petrol) engine and a battery-powered motor powertrain. The petrol engine is used to drive and to charge when the battery is drained. The battery motor assists the petrol engine in reducing fuel consumption, resulting in higher fuel efficiency
- Plug-in Hybrid Electric Vehicle (PHEV): PHEVs use an internal combustion engine alongside a battery-charged motor. A PHEV battery is charged from a power source (plugged in) rather than the engine. PHEVs are more efficient than HEVs but less efficient than BEVs.
- Fuel Cell Electric Vehicle (FCEV): Electrical energy is produced from fuel cell stacks, which convert hydrogen to electricity.
*Source: e-amrit
Why Choose EVs?
Studies show EVs offer savings on fuel and maintenance; for instance, EVs can cost up to 50% less than their gasoline counterparts in daily operations.
A common argument against EVs is that they have a higher environmental impact during the manufacturing stage. A study by the IEA shows that although mineral extraction is emission-intensive, EVs' full life cycle emissions are half that of conventional cars.
EVs in India's Dominant Two-Wheeler Segment**
The net carbon dioxide emissions from an E2W is 3 tonnes during its entire lifecycle compared to 4.8 tonnes for an ICE 2W. An electric scooter for private use has about 38% lower greenhouse gas ("GHG") emissions than a petrol scooter (~1.8 tCO2e). Similarly, transitioning private motorcycles to battery electric vehicles can reduce approximately 1.1 to 1.3 tCO2e, representing about 26% less GHG emissions than petrol motorcycles.
**Source : DRHP of 2W EV Manufacturer
Tools to Assess EV Impact
Several calculators can help estimate the impact of switching to EVs:
- CO2 emission savings calculator by e-amrit.niti.gov.in
- CEEW savings calculator
- IEA Calculator to choose multiple factors: Vehicle characteristics, Internal combustion, Battery EV and most important energy source.
Government Support for EV Adoption
In India, several policies have been implemented to promote the adoption of electric vehicles (EVs). These include production-linked incentives for manufacturers, tax reductions, benefits under the Faster Adoption and Manufacturing of Electric Vehicles (FAME) program, and stricter emission standards.
- FAME II scheme provided purchase incentives, valid till April 2024.
- The PM E-DRIVE Scheme launched in October 2024 and is valid till March 2026. It covers 2W/3W, the public fleet, and charging infrastructure. The demand incentive is proposed at Rs. 5,000 per kWh for e-2Ws/e-3Ws registered in FY 2024-25 and Rs. 2,500 per kWh for FY 2025-26. Incentives will be capped per vehicle or at 15% of the ex-factory price
- Production Linked Incentive (PLI) scheme in place for supporting manufacturers.
- Tax benefits for consumers by different states ( Comparison of state-wise policies as of 2023 appended as a resource for further reading).
EVs: A Cleaner Alternative Amid India's Fossil-Fuel Dependency
It helps avoid tail-pipe emissions, contributing to more than 20% of urban pollution. At the same time, India is taking steps towards creating solar-powered EV charging infrastructure with few charging stations already operational. India plans to open more in line with India's aim to transition to solar power.
Recycling EV Batteries
Recyclers are looking to extract value from these spent EV batteries, which typically have a lifespan of 5-8 years. EVs started gaining popularity in India around 2017-18, so the first wave of batteries from those early models is now nearing the end of its life cycle and beginning to enter the recycling chain.
Reports indicate that batteries find valuable second-life applications in industrial equipment and power backup systems. At the end of their service life, 98% of battery components can be recycled, creating a nearly closed-loop system. However, these two elements will now be tested in India.
Global and Regional Adoption
In 2023, nearly one-fifth of all cars sold globally were electric vehicles (EVs), capturing an 18% market share. This marks a significant increase from 14% in 2022 and just 2% five years earlier in 2018.
Regional adoption rates provide an insightful overview of global electric vehicle (EV) penetration:
- China leads the way, with more than one-third of new car registrations being electric vehicles.
- Europe closely follows, where electric vehicles account for over one-fifth of new car sales.
- In the United States, one in ten new vehicles sold is electric.
- India, although still in the early stages of EV adoption, has demonstrated significant growth, with approximately 80,000 new registrations in 2023. This represents a robust 70% year-over-year increase, accounting for 2% of all car sales.
EV Market Growth: Global and Indian Volumes Compared
Around 5 Mn E2W (Electric 2-wheelers) were sold out of a total of ~ 67 Mn 2-wheelers with 7% penetration. EVs also account for 18% of total passenger car sales, with 14 million units sold worldwide. (CY 2023).
In India in Fiscal Year 2024, E2W penetration increased to 5.1%, and EV penetration in the scooter segment increased to ~15%.
India's EV Milestones: Sales and Dominant Segments
Cumulative e-vehicle sales in India reached 41,35,077 units by the end of FY2024. Annual EV sales crossed 1.7 million vehicles in FY2024, with more than 55% of the share accounted for by registered electric two-wheelers (E2W) and passenger electric three-wheelers (E3W P) with ~32% market share.
India has achieved significant milestones in specific EV segments:
- World's largest electric 3-wheeler market
- 70% year-on-year growth in electric car registrations (80,000 units)
- Current 2% market share for electric cars (Total car population on Indian roads exceeds 30 million)
Key Hurdles to Electric Vehicle Adoption in India
Key challenges include higher upfront costs, availability of charging infrastructure although increasing YOY, and servicing infrastructure & talent with recent issues on delayed servicing by one key E2W player.
The Road Ahead: Overcoming Challenges for a Sustainable EV Future
The transport sector accounts for over 15% of global energy-related emissions. While the transition to electric vehicles presents some challenges today, the environmental and health benefits make it a crucial step toward sustainable transportation, particularly in regions facing severe air quality issues. The combination of technological advancement YOY developing ecosystem of service providers- charging infrastructure, battery swap, recycling, etc., policy support, and growing market acceptance suggests a promising future for electric mobility.
