The Electric Vehicle (EV) market in India is booming, with consumer demand surging every year. The Economic Survey 2023 predicts that India's electric vehicle market will see a 49% compound annual growth (CAGR) between 2022 and 2030, with annual sales of 1Cr by 2030. Among the various factors fuelling this growth, the Indian consumer choice has emerged as a significant reason. Compared to the global average of 52%, it is expected that 70% of automobile purchasers in Tier-1 centres in India are open to considering an electric car as their next purchase.

So, what really is fuelling the EV growth story in India?

A strong government push

With almost 40 Cr people in India needing modern and efficient transport solutions, the Government of India (GoI) is increasingly relying on EVs to reduce fuel consumption and provide a sustainable and environment-friendly mode of transport. India is among the few countries supporting the EV30@30 campaign. Under this, the country must achieve an EV adoption rate of 30% by 2030. Some of the key government policy measures to achieve this target include:

i  NEMMP and FAME: These schemes provide a comprehensive framework to catalyse adoption of electric vehicles in India. Policies like these provide purchase-linked incentives for electric vehicle manufacturers and financial incentives for EV buyers, reducing the upfront cost of EVs and promoting wider adoption.

• NEMMP: In 2013, the Government of India launched the National Electric Mobility Mission Plan (NEMMP) with the objective of achieving fuel security by promoting hybrid and electric vehicles in the country. The NEMMP is a document that provides a vision and roadmap for the faster adoption of electric vehicles. As a part of this plan, in 2015, the Ministry of Heavy Industries devised a scheme called FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India) to accelerate manufacturing of electric and hybrid vehicle technology.
• FAME I: The first phase of this scheme was launched from 1^st April 2015 and continued till 31^st March 2019. This phase focused on four key areas namely, demand creation, technology and innovation, pilot projects and charging infrastructure.
• FAME II: The second phase of the scheme commenced in April 2019 with the main objective being to encourage faster adoption of electric and hybrid vehicles by offering upfront incentives on vehicle purchase as well as faster establishment of EV charging infrastructure across the country.

ii  Tax Benefits and exemption: Under section 80EEB of the Income Tax Act, EV buyers can claim a tax deduction of up to 1.5 lakhs on the interest paid on loans to buy an EV.

iii  Investments in Charging Infrastructure: The government as well as many charge point operators are is actively developing charging infrastructure nationwide, addressing range anxiety and facilitating convenient EV ownership.

iv  100% Foreign Direct Investment (FDI): As a part of FAME Policy With diverse segments like scooters and electric cars attracting major automakers' investments, India's EV market is poised for a transformative ride.

Market significance

The EV revolution in India is not just about cleaner transportation; it presents a significant economic opportunity.