Challenges and Opportunities: The Future of Electric Vehicles in India

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India is one of the world’s largest markets for two and three wheeled vehicles, ranking among the global top five for private cars and commercial vehicles. Electric Vehicles (EVs) accounted for about 5% of total vehicle sales between October 2022 and September 2023, and could reach more than 40% penetration by 2030, driven by strong adoption (45%+) in both two-wheeler (2W) and three- wheeler (3W) categories.

The EV market is expected to grow at a CAGR of 49% from 2022 to 2030, with major contributions from the e-2W and e-3W segments. The reduction in upfront costs, uptake in both personal and commercial mobility segments, increased awareness about benefits, and continued central and state-level subsidies are factors driving higher EV sales in the e-2W and e-3W segments.

However, the share of EVs in total vehicle sales (as of mid-November 2023) is below 1%. Thus, the country needs to boost EV adoption to remain aligned with its target of achieving a 30% share of EVs in overall vehicle sales by 2030.

Recently, the Government of India has taken various progressive steps to accelerate EV adoption. As a result, the country has witnessed growing EV demand, with a CAGR of around 50% in the last five years. Considering the EV sales penetration targets set by NITI Aayog, which include 30% of private cars, 70% of commercial cars, 70% of buses, and 100% of two- and three-wheelers by 2030, it is expected that there will be approximately 90 million EVs on Indian roads by 2030, resulting in a reduction of around 28 million metric tonnes of carbon emissions. Moreover, to support these EVs, around 444,000 public EV chargers would be required by 2030. Currently, there are over 10,000 public EV charging stations operational across the country. The complete transition to EVs requires a total investment of US$267 billion (Rs.19.7 lakh crore) in EVs, battery infrastructure, and charging infrastructure.

2W EVs form the majority of EV sales today, accounting for 85%–90% of all EV units sold in India, followed by 4W
EVs (7%–9% of sales) and 3W EVs (5%–7% of sales). While Phase II of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme was recently revised, 2W EV penetration has remained stable at around 5%, in line with Jan–Mar 2023 levels (with only a marginal decline in Jun–Jul 2023). 3W EV and 4W EV penetration levels experienced an upswing, with volumes more than doubling over the past 12 months, driven by low total cost of ownership (TCO).

The shift towards electric vehicles in India will have a significant impact on the environment. Currently, the transportation sector in India is a major contributor to pollution. Take the capital, New Delhi, for example, where two- and three-wheelers contribute 50% to the surface PM 2.5 levels. India’s transportation sector also accounts for about one-fifth of the country’s total energy use. In light of these numbers, EVs can have a huge impact on India’s environment in the following areas.
According to the research study by the Council on Energy, Environment and Water (CEEW), if the share of EVs increases to 30% by 2030, India could save up to US$14 billion on its oil import bill.

Smart Mobility Innovations and Solutions
1. Advanced Parking Solutions

• Smart Parking Systems: Utilising IoT sensors and AI algorithms to provide real-time information about available parking spaces, reducing the time spent searching for parking and thereby decreasing traffic congestion.
• Automated Parking Systems: Implementing automated parking facilities that can efficiently park and retrieve vehicles using robotic technology, maximising space utilisation in urban areas.
• Parking Reservation Apps: Development of mobile applications that allow users to reserve parking
  spots in advance, integrated with payment systems for seamless transactions.

2. Innovative Public Transport Solutions

• Intelligent Transport Systems (ITS): Leveraging AI and IoT to optimize public transport schedules, routes, and frequencies based on real-time demand and traffic conditions.
• Electric Buses and Shared Mobility: Promoting the use of electric buses and shared mobility services like
  e-scooters and bike-sharing programs to reduce carbon emissions and enhance urban mobility.
• Mobility-as-a-Service (MaaS): Integrating various forms of transport services into a single accessible on-demand service through a unified platform, allowing users to plan, book, and pay for multiple types of mobility services.

3. Fluid Mobility and Seamless Travel

• Multi-modal Transport Hubs: Developing integrated transport hubs that facilitate seamless transfers between different modes of transport (e.g., buses, trains, bicycles), enhancing the user experience and reducing travel time.
• Contactless Ticketing Systems: Implementing contactless payment and ticketing systems using RFID, NFC, or mobile apps to streamline the boarding process and reduce waiting times.
• Real-time Traffic Management: Utilising AI and machine learning to predict and manage traffic flow dynamically, providing real-time updates to commuters via mobile apps and digital signage.

4. Traffic Decongestion Strategies

• Adaptive Traffic Signal Control: Deploying adaptive traffic signals that adjust timings based on
  real-time traffic conditions, using AI and sensor data to optimise traffic flow and reduce bottlenecks.
• Dynamic Toll Pricing: Implement dynamic pricing models for toll roads based on traffic density and time of day to manage congestion and encourage off-peak travel.
• Carpooling and Ride-sharing Incentives: Encouraging carpooling and ride-sharing through dedicated
  lanes, reduced toll fees, and other incentives to reduce the number of vehicles on the road.

Challenges Hindering EV Adoption in India
1. Charging Infrastructure
India faces significant challenges in developing adequate charging infrastructure for EVs. There are currently 28.17 lakh EVs in India. However, just 15,493 electric vehicle charging stations are operational (as per the Vahan portal of the Road Transport Ministry). There is just 1 charging station for every 182 EVs. The ideal ratio is
6-to-20 EVs per public charger.

Impact

•  High operating costs and uncertain utilisation rates discourage private investment.
•  Limited availability of charging stations outside urban areas hinders widespread adoption.

Government Response

• Providing subsidies and incentives to promote the establishment of charging infrastructure.
• Offering legal and regulatory support to facilitate easier setup and operation of charging stations.
• Developing low-cost AC charge points for metros, railways, parking spaces, and other public areas.

2. Batteries Used in EVs

•  Challenge: Dependency on lithium- ion batteries poses multiple challenges. Current batteries limit EV range and efficiency. Innovations in lightweight materials, higher energy density, and renewable charging sources are needed. Government initiatives like the National Mission for Transformative Mobility and Battery Storage support local battery manufacturing and R&D.
•  Issues

 High costs due to import dependence on materials like lithium, cobalt, and nickel.
 Environmental concerns related to resource extraction (water usage, soil contamination, air pollution).
 Limited recycling capabilities, leading to waste management challenges.

•  Innovations and Alternatives

 Exploration of alternatives such as dual carbon and aluminium- air batteries to reduce costs and environmental                         impact.
 Government support for indigenous battery manufacturing and research through initiatives like the National                             Mission for Transformative Mobility and Battery Storage.

3. Research and Development

• Challenge: India lags in indigenous R&D capabilities for EV technologies.
•  Focus Areas
   Battery technology: Improving energy density, lifespan, and affordability.
   Component innovation: Developing locally sourced and manufactured EV components.
   Fast charging technologies: Tailoring to Indian conditions.
• Government Initiatives

 Supporting research institutions like ARAI (Automotive Research Association of India) to drive innovation and                         adaptation of EV technologies.

4. Pollution

• Challenge: Despite EVs’ cleaner operations, challenges remain.
• Concerns

 Charging infrastructure often relies on fossil fuels (coal), compromising environmental benefits.
 Environmental impact of battery production (resource extraction, pollution).
 Disposal and recycling challenges for lithium-ion batteries.

• Regulatory Framework

 Draft Battery Waste Management Rules to address handling, recycling, and disposal of EV batteries.
 Push towards cleaner energy sources like solar, wind, and hybrid power plants for charging infrastructure.

5. Consumer Attitude

• Challenge: Cost-effectiveness and awareness are key barriers to consumer adoption.
• Factors
   Perception of high initial costs and concerns about battery life and replacement costs.
   Limited awareness of EV benefits and technological advancements.
   Influence of global trends (e.g., Tesla) and government incentives on consumer choices.
•  Government Measures

 Financial incentives (subsidies, tax benefits) to reduce upfront costs for EV buyers.
 Awareness campaigns to educate consumers about long-term savings and environmental benefits of EVs

6) Lack of Clean Energy: India heavily relies on coal for electricity generation, posing a challenge to reducing carbon emissions through EV adoption. The government is exploring alternatives like solar, wind, and nuclear energy, along with
biofuels for EV manufacturing.

Current partnerships by the Office of the Principal Scientific Adviser related to EV (including Innovation challenges on Manthan platform)

• Call for Expression of Interest (EoI) from Indian Start-ups and Small and Medium- sized Enterprises (SMEs) – Matchmaking Event on Battery Recycling Technologies for Electric Vehicles organised by
  India-EU TTC Working Group 2 (WG 2) on Green & Clean Energy Technologies

The Office of the Principal Scientific Adviser to the Government of India announces the Matchmaking Event on Battery Recycling Technologies for Electric Vehicles, under the aegis of India-EU TTC Working Group 2 on Green & Clean Energy Technologies. This event is part of a broader effort to promote sustainable innovation and forge stronger economic relations with the European Union.

A virtual matchmaking event focused on Battery Recycling Technologies for Electric Vehicles (EVs) took place on June 20th under the auspices of the India-EU TTC Working Group 2 on Green & Clean Energy Technologies. The deliberations underscored the importance of fostering innovation and cooperation in the field of green technologies, particularly in the rapidly growing EV sector. The event featured presentations from 12 startups (6 from India and 6 from the EU) specialising in EV battery recycling. They showcased innovative solutions to venture capitalists, investors, and experts. The aim was to support and promote these startups by providing a platform to highlight their technology, forge partnerships, and explore investment opportunities. This virtual event facilitated new partnerships, identified investment prospects, and raised awareness in EV battery recycling, marking a significant stride toward sustainable battery circularity.

• iCreate’s Electric Vehicle Innovation Challenge – EVangelise

 EVangelise ’23: It took the innovation challenge to a new level by collaborating with universities, colleges, and incubators to scout for new startups. It provided proof-of-concept startups with opportunities for strategic partnerships with industrial partners and facilitated connections between established startups and venture capital firms. The challenge focused on 2 & 3 wheelers, 4 wheelers and above, earth movers and heavy vehicles, and zero-emission trucking. Innovations were categorised into the idea stage (TRL 4 or below) and scale-up stage (TRL 5 or above), covering traction, energy, telematics, intelligence, and connectivity. Activities included a launch event in June 2023, 49 roadshows, bootcamps, and an expo with 50+ stalls. With a geographical reach of 183 cities, the challenge received 2,796 applications, shortlisted 45 startups, and supported 12. Key partners included PHD-CCI for industry, Mathworks for technology, TEXMiN for R&D, and ISBA and Engineering Technique for outreach. Prize money totaled Rs. 42 lakhs.

 EVangelise ’22: It aimed to connect industry leaders with startups supported in EVangelise ’21, as well as new startups scouted from universities, colleges, and incubators. Focusing on 2 & 3 wheelers, the challenge categorised innovations into tech development (TRL 4 and below) and manufacturing partnership (TRL 4 and above), covering vehicle traction, energy storage, and infrastructure. Activities included a launch event in July 2022, 12 physical roadshows, 2 on- campus events, bootcamps, and an expo with 50 stalls and over 500 visitors. With a geographical reach of 183 cities, the challenge received 1,160 applications, shortlisted 40 startups, and supported
12. Key partners included Startup India, CII CIES, MeitY Startup Hub, Mathworks, Altair, Ansys, Microsoft, Engineering Technique, Vel Tech Incubator, PSA – GoI, t-Hub, BPCL, Sona Comstar, Stryder Bikes, Aditya Auto, and Inevitable Electronics Pvt Ltd. Prize money totaled Rs. 63 lakhs.

 EVangelise ’21: The first edition of iCreate’s EVangelise ’21 innovation challenge, launched in July 2021, concluded in January 2022. It aimed to solve key EV industry problems at the component level, receiving 843 applications and featuring 16 roadshows. The challenge awarded INR 71.75 lakh in cash prizes. Top winners—Clean Electric, Gremot Mobility, and Webber Electrocorp—received cash grants, incubation support, and access to iCreate’s facilities. Supported by technology partners and the Government of Gujarat, the event saw 40 finalists pitch innovations, aligning with the goal to “Innovate for Industry.”

MG Developer Program and Grant Season 5: MG Motor India has launched the Developer Program and Grant 5.0 in collaboration with Startup India, the Office of the Principal Scientific Advisor to the Government of India (Manthan), DRIIV, AWS, Lohum, and Exicom Telesystems. This innovation initiative aims to inspire developers and
innovators to create solutions addressing India’s mobility challenges. Open to students, startups, and tech companies, MGDP offers mentorship, recognition, and collaboration opportunities with MG and its partners. The theme of MGDP 5.0 is Artificial Intelligence in Electric Mobility, focusing on AI applications across various categories such as logistics, battery technology, vehicle-to-everything (V2X), vehicle technology, charging infrastructure, vehicle diagnosis, customer experiences, manufacturing, and vehicle design. So far, more than 1450 startups and innovators have participated in MGDP over the last 4 seasons.

ElectronVibe 2022 program: ElectronVibe is a business-case competition aimed at showcasing innovations by mature startups in the power sector for Indian electric utilities. It featured two tracks: EV Infrastructure and Grid Modernization. Partners included BSES Rajdhani (BRPL) and Brihanmumbai Electric Supply & Transport Undertaking (BEST). The program’s goal was to increase renewable energy production, enhance electricity quality, and promote EV adoption in India. Startups like Kazam are expanding EV charging networks, aiming to install 30,000 stations by 2023. EmbedSense uses AI/ML to smarten grid structures, enhancing safety and reducing outages through predictive maintenance. Both Kazam and EmbedSense won under the EV infra track, while Powerbot, which optimises the use of electricity through monitoring and analytics, was selected as the winner of the Grid Modernization Track. New Energy Nexus has supported 11 startups through incubator, accelerator, scale, or funding programs, engaging 72 entrepreneurs, including 57 women entrepreneurs, and collaborating with 22 strategic partners (through participation, joint programming, sponsorships, or other forms of collaborations), covering 18.8% women-led startups.

Some more examples of Indian Academic and Startup Innovations

•  Revolt Motors has introduced IoT-enabled electric motorcycles
  with features like remote diagnostics and over-the-air software updates, leveraging cloud computing for seamless connectivity and an enhanced user experience.
•  Academic institutions like IIT Madras have developed indigenous battery technologies and energy storage solutions, contributing to the advancement of electric vehicle technology in India.
• Startups like Ather Energy have witnessed a significant increase in sales, with their electric scooters becoming increasingly popular in urban markets. Ather’s sales grew by 2.5 times in 2023 compared to the previous year.
•  Academic institutions such as IIT Madras have received substantial funding and grants for research and development in electric vehicle technologies, which has helped progress their battery research and development projects.

Also Read | Unlocking EV Growth: The Power of Creative Financing

Conclusion

Data from industry reports show that collaborative research projects between academia and industry stakeholders have resulted in a 40% increase in patent filings related to electric vehicle technologies in India over the past five years. India’s ambitious push towards electric vehicles (EVs) is bolstered by robust growth projections and innovative initiatives like EVangelize, MG Developer Program, and ElectronVibe.

Despite challenges in infrastructure and technology, collaborations between government, academia, and startups promise a transformative shift towards sustainable mobility solutions, driving down emissions and enhancing energy efficiency in transportation. Best practices observed in successful collaborations include establishing technology incubation centers within academic institutions, providing funding support for joint research projects, and facilitating technology transfer through industry-academia partnerships.

Views expressed by: Dr. Sapna Poti, Director, Strategic Alliances, Office of Principal Scientific Adviser to Government of India

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