People are worried about climate change and the negative effects of traditional vehicles, pushing them towards EVs. EVs are valued for having no tailpipe emissions and being able to use renewable energy. Government incentives and corporate sustainability efforts also boost the demand for EVs, writes H.S. Bhatia, Managing Director, Daewoo India
The global shift towards sustainability is changing how people behave, especially in terms of energy use. India, with its fast-growing population and economy, is a key player in this movement. A major part of this change is the increasing use of electric vehicles (EVs), showing a strong commitment to sustainability among Indian consumers. This change is driven by concerns for the environment and new economic opportunities.
The Rise of Electric Vehicles
India has seen a big increase in the use of EVs, with over 1.5 million sold in 2023. This shows that people are more interested and excited about electric mobility. A study by McKinsey found that 70 percent of car buyers in major Indian cities are thinking about getting an EV next, compared to 52 percent worldwide. In the two-wheeler market, 86 percent of buyers prefer EVs over traditional vehicles.
This change is mostly because people see EVs as better for the environment. The study shows 67 percent of potential buyers are willing to pay more for EVs because they reduce emissions. Also, 26 percent are drawn to EVs because they cost less to run and are quieter. These factors suggest the EV market could grow to 10-15 percent by 2030.
Environmental Concerns
People are worried about climate change and the negative effects of traditional vehicles, pushing them towards EVs. EVs are valued for having no tailpipe emissions and being able to use renewable energy. Government incentives and corporate sustainability efforts also boost the demand for EVs.
The Indian government aims for EVs to make up 5 percent of all vehicles by 2030, potentially avoiding 25 million metric tons of CO2 emissions. In a more aggressive scenario, with 50 percent of new vehicle sales being EVs, emissions savings could reach 43 million metric tons. To meet these goals, India needs to achieve 46 percent renewable energy in its electricity mix.
Government Efforts and Market Changes
The Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme by the Indian government has been key in promoting EV use. Both central and state governments have policies to support this change, like regulating traditional vehicles in cities to reduce pollution and traffic.
Car manufacturers are also helping this shift. Established companies are setting ambitious goals for making more electric models, while new companies are designing EVs for India’s cities. These efforts make EVs more accessible and appealing to buyers.
Changing Consumer Behaviour
The rise in EV use is part of a larger trend where consumers are prioritizing sustainability. A survey shows that 75 percent of Indians are changing their habits to be more sustainable. This change is seen in various ways: 27 percent are more loyal to sustainable brands, 23 percent support sustainable products and services, and 20 percent choose sustainable options.
With its large population and growing economy, India is a key player in the global EV market. Full adoption of EVs in India would be a major step towards sustainable global mobility.
Environmental Benefits of EVs
The transportation sector in India contributes significantly to pollution, especially in cities, with two- and three-wheelers being major sources in places like New Delhi and comprising a large part of the country’s energy use. Adopting EVs can greatly improve India’s environment by reducing air pollution, as traffic contributes 27 percent of the total, causing 1.2 million deaths annually. EVs can mitigate this and also decrease noise pollution since they lack the mechanical parts of traditional vehicles, leading to quieter cities. Additionally, EVs convert 60 percent of electrical energy from the grid into power, compared to 17-21 percent for petrol or diesel cars, making them more efficient and cheaper to run, which boosts their demand.
Economic Opportunities
The move towards EVs in India also presents many economic opportunities. The EV industry could create millions of new jobs, supported by India’s large pool of qualified talent.
Challenges and Solutions
Despite the positive outlook, India faces several challenges in fully adopting EVs. Most of India’s electricity comes from coal, which reduces the environmental benefits of EVs. To address this, the government is looking into solar, wind, and nuclear energy. Additionally, India needs more charging stations for the growing number of EVs. The government is working with private companies to improve this, offering various incentives. Another challenge is the limited range of current EV batteries. Innovations in battery technology, supported by government initiatives, are needed to overcome this. Finally, some people, especially in rural areas, are hesitant to adopt new technologies. Awareness and education programs, along with affordable EV options, can help.
India is moving towards greater energy efficiency and sustainability, with EVs playing a central role. Driven by environmental concerns, government initiatives, and economic opportunities, Indian consumers are increasingly choosing EVs. While challenges exist, combined efforts from the government, private sector, and consumers will help pave the way for a sustainable future in mobility. As India progresses, it has the potential to lead the world in sustainable development, setting an example for others to follow.