Context

The transition to electric mobility is a promising global strategy for decarbonising the transport sector.

Electricity mobility revolution

• The global electric mobility revolution is today defined by the rapid growth in electric vehicle (EV) uptake.
• This phenomenon is today defined by the rapid growth in EV uptake, with EV sales for the year 2020, reaching 2.1 million.
• Falling battery costs and rising performance efficiencies are fueling the demand for EVs globally.

Significance of India’s transition to electric mobility

• India is the fifth largest car market in the world and has the potential to become one of the top three in the near future.
• India is among a handful of countries that supports the global EV30@30 campaign, which aims for at least 30 per cent new vehicle sales to be electric by 2030.
• Part of global climate agenda: The push for EVs is driven by the global climate agenda established under the Paris Agreement to reduce carbon emissions in order to limit global warming.
• Ensuring energy security: It is also projected to contribute in improving the overall energy security situation as the country imports over 80 per cent of its overall crude oil requirements, amounting to approximately $100 billion.
• Job creation: The push is also expected to play an important role in the local EV manufacturing industry for job creation.
• Strengthen grid operation: Through several grid support services, EVs are expected to strengthen the grid and help accommodate higher renewable energy penetration while maintaining secure and stable grid operation.

Battery storage: Opportunities and challenges

• Promoting sustainable development: With recent technology disruptions, battery storage has great opportunity in promoting sustainable development in the country, considering government initiatives to promote e-mobility and renewable power (450 GW energy capacity target by 2030).
• Economic opportunity: With rising levels of per capita income, there has been a tremendous demand for consumer electronics in the areas of mobile phones, UPS, laptops, power banks etc. that require advanced chemistry batteries.
• This makes manufacturing of advanced batteries one of the largest economic opportunities of the 21st century.
• Concern of absence of manufacturing base: It is estimated that by 2020-30 India’s cumulative demand for batteries would be approximately 900-1100 GWh, but there is concern over the absence of a manufacturing base for batteries in India, leading to sole reliance on imports to meet rising demand.

Government schemes to promote EV ecosystem

• To develop and promote the EV ecosystem in the country, government has remodeled Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme (Rs 10,000 crore) for the consumer side.
• It has also launched production-linked incentive (PLI) scheme for Advanced Chemistry Cell (ACC) ( Rs 18,100 crore) for the supplier side.
• Finally the recently launched PLI scheme for Auto and Automotive Components (Rs 25,938 crore) for manufacturers of electric vehicles was launched.
• All these forward and backward integration mechanisms in the economy are expected to achieve robust growth in the coming years and will enable India to leapfrog to the environmentally cleaner electric vehicles and hydrogen fuel cell vehicles.

Benefits of EV ecosystem

• This will not only help the nation conserve foreign exchange but also make India a global leader in manufacturing of EVs and better comply with the Paris Climate Change Agreement..
• Battery demand creation: All three schemes cumulatively expect an investment of about Rs 1,00,000 crore which will boost domestic manufacturing and also facilitate EVs and battery demand creation along with the development of a complete domestic supply chain and foreign direct investment in the country.
• Reduction of oil import bill: The programme envisages an oil import bill reduction of about Rs 2 lakh crore and import bill substitution of about Rs 1.5 lakh crore.

Conclusion

India’s push for EV ecosystem is in line with the country’s climate change commitments, will help boost manufacturing sector and also help ensure energy security.

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