In a transformative turn of events, India experienced a staggering 49.25% growth in Electric Vehicle (EV) sales during the calendar year 2023, as reported by the Federation of Automobile Dealers Association (FADA). This surge marks a significant leap towards a sustainable and eco-friendly automotive landscape. Let’s delve into the details of this paradigm shift and explore the factors contributing to this impressive growth.
Unprecedented Growth Across EV Categories
Breaking down the growth percentages across different categories of electric vehicles provides a comprehensive overview of the industry’s evolution:
2 Wheelers: Witnessing a commendable 36.09% growth, two-wheeled electric vehicles have become increasingly popular, offering a sustainable commuting option for urban residents.
3 Wheelers: The three-wheeler segment saw an exceptional growth rate of 65.23%, indicating a substantial shift towards electric alternatives for public transportation and last-mile connectivity.
Commercial Vehicles: With an astonishing growth rate of 114.16%, electric commercial vehicles are gaining traction, not only for their environmental benefits but also for their economic viability.
Passenger Vehicles: The passenger vehicle category recorded an impressive growth rate of 114.71%, reflecting a growing consumer preference for electric cars.
Government Initiatives Driving the Electric Wave
This remarkable surge in EV sales can be attributed to a slew of Government initiatives aimed at promoting the adoption of electric vehicles and bolstering the electric vehicle ecosystem in the country. The Ministry of Heavy Industries has rolled out three key schemes to accelerate the transition to electric mobility:
Phase II of FAME India (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India)
Launched in April 2019, this scheme initially had an outlay of Rs. 10,000 Crore, which was later enhanced to Rs. 11,500 Crore. FAME India focuses on incentivizing the manufacturing and adoption of electric and hybrid vehicles over a five-year period.
Production Linked Incentive (PLI) Scheme for Automobile and Auto Component Industry
Approved in September 2021 with a budgetary outlay of Rs. 25,938 crores, this scheme offers incentives up to 18% specifically for electric vehicles, encouraging manufacturers to invest in the production of electric automobiles and components.
National Programme on Advanced Chemistry Cells (ACC) Battery Storage
Approved in May 2021 with a budgetary allocation of Rs. 18,100 crore, this PLI scheme aims to establish a competitive ACC battery manufacturing setup in the country, fostering advancements in battery technology crucial for electric vehicles.
Comprehensive Government Measures for EV Adoption
In addition to the key schemes mentioned above, the Government of India has implemented various measures to create an environment conducive to the growth of electric vehicles:
GST Reduction
Government of India has reduced the Goods and Services Tax (GST) on electric vehicles and chargers/charging stations to 5%, making EVs more affordable for consumers and promoting widespread adoption.
Green License Plates
The Ministry of Road Transport & Highways (MoRTH) has taken a symbolic step by issuing green license plates for battery-operated vehicles. This not only distinguishes electric vehicles on the road but also comes with the benefit of exemption from permit requirements, facilitating smoother mobility.
Road Tax Waiver
The Ministry of Road Transport & Highways (MoRTH) has actively encouraged states to waive road tax on electric vehicles, thereby reducing the initial cost of ownership and further incentivizing potential buyers.
Economic Stability and Loan Accessibility
The stability of the Reserve Bank of India’s (RBI) repo rate at 6.50% since February 2023 has played a pivotal role in maintaining favourable conditions for vehicle loans, including those for electric vehicles. This consistency in interest rates contributes to making financing options more accessible, encouraging consumers to embrace electric mobility.
A Green Road Ahead: Looking Forward
Substantial growth in electric vehicle sales, coupled with proactive government interventions, sets the stage for a green automotive revolution in India. As the country strives to achieve its environmental sustainability goals, the increasing adoption of electric vehicles represents a positive stride towards reducing carbon emissions and dependence on traditional fossil fuels.
The confluence of Government initiatives, financial incentives, and a growing environmental consciousness among consumers has propelled the electric vehicle industry to new heights in India. The impressive growth witnessed in 2023 is a testament to the effectiveness of these measures and underscores the nation’s commitment to a sustainable and cleaner future in the realm of transportation. As the momentum continues, it is clear that electric vehicles are not just a trend but a transformative force shaping the future of mobility in India.