National Council of Applied Economic Research
Opinion: Souryabrata Mohapatra and Arindam Paul.
India’s push toward electrical vehicles (EVs) by 2030 is a bold and necessary step, aimed at achieving 10 million EV sales annually and creating 50 million jobs across the ecosystem.
India’s push toward electrical vehicles (EVs) by 2030 is a bold and necessary step, aimed at achieving 10 million EV sales annually and creating 50 million jobs across the ecosystem. As the country races towards this ambitious target, it finds itself at the crossroads of opportunities and challenges. Can India lead the electric revolution, or will infrastructure and cost barriers slow its progress?
EVs offer significant environmental and economic benefits. The transportation sector accounts for over 10 per cent of India’s greenhouse gas emissions, and electric vehicles are the key to reducing this. India already has over 3 million EVs registered, and sales rose 45 per cent in 2023-24. Besides reducing emissions, EVs can address public health concerns. Cities like Delhi and Mumbai, known for high air pollution, stand to benefit from cleaner air. EVs are cheaper to maintain than petrol or diesel vehicles, offering long-term cost savings for consumers.
But even with these advantages, has the transition been fast enough? Are incentives strong enough to encourage mass adoption? Government policies, like the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, have been crucial in accelerating EV adoption. The Production Linked Incentive (PLI) scheme aims to boost domestic battery and EV manufacturing, reducing dependence on imports. By 2030, the Indian EV market is expected to grow to 20 trillion, with 4 trillion in financing. With the right incentives, India could also become a leading exporter of lithium-ion batteries. But will policy alone be enough to drive investment and consumer adoption, especially in a country with vast income disparities? One of the largest obstacles to widespread EV adoption is the lack of a reliable charging infrastructure.
India currently has just over 12,000 public charging stations, far fewer than required to support growing EV numbers. Consumers, especially in rural areas, continue to face “range anxiety,” worrying about running out of charge without access to a nearby station. Addressing this will require largescale investment in charging infrastructure, especially in underserved regions. Without a robust network of charging stations, India’s EV goals will remain distant. Despite declining battery prices, EVs remain expensive. Batteries make up 30-40 per cent of an EV’s total cost. While the government has reduced customs duties for EV components, the high initial cost remains a barrier for many consumers. Additionally, battery safety concerns, including incidents of fires, have raised doubts about the technology. Stronger safety regulations and better battery management systems are necessary to build consumer trust.
Can India scale battery production fast enough to drive down costs? And will advancements in battery technology be able to keep pace with the rising demand? EVs will only achieve their full potential if powered by clean energy. With India still reliant on coal for a significant portion of its electricity, the environmental benefits of EVs could be undermined. The government’s efforts to integrate renewable energy, especially solar and wind, into the grid are encouraging, but more needs to be done to ensure the grid can handle the increased demand that EVs will bring. India is poised to become a major player in lithium-ion battery production by 2030, which will reduce dependence on imports and support renewable energy storage solutions.
However, the challenge remains to align the growth of the EV sector with sustainable energy practices. The EV sector presents an enormous opportunity for job creation. The government estimates that by 2030, the sector could create 50 million jobs, including direct employment in manufacturing, charging infrastructure, and related services. This is particularly significant for India, with millions of young people entering the workforce each year. India, already the world’s thirdlargest automotive market, stands to further cement its place as a global leader in automotive manufacturing by embracing electric mobility.
But will the workforce be ready to meet the demands of a rapidly changing industry? India’s goal of achieving 10 million EV sales annually by 2030 is both ambitious and necessary. While challenges such as infrastructure gaps and affordability persist, the opportunities for economic growth, job creation, and environmental benefits are immense. With strong government backing, continued investments in infrastructure, and a focus on renewable energy, India can lead the global transition to electric mobility. The road to 2030 will be tough, but with the right policies and investments, India can become a model for other nations. Will India rise to the challenge and deliver on its electric promise? Only time will tell.
The writers are with NCAER New Delhi and IIT Bhubaneswar, respectively. The views expressed are personal.