For decades on the trot, car manufacturers globally have been hard at work finding alternatives to fossil fuels. We have now finally reached the stage when mass adoption of EVs is looking more and more like a possible reality. In fact, many countries in the world are pushing excessively towards this goal with the aim of giving up their reliance on fossil fuels and having a positive effect on the environment. In India, car and motorbike manufacturers have increasingly been offering great EV options for consumers to take advantage of. That, coupled with several provisions from state and central governments only mean good things for the adoption of EVs.
The impact of COVID-19 resulted in shutting down of production of various original equipment manufacturers (OEM). This eventually led to the disruption of the entire value chain of major industries in India, and therefore negatively affected the production of auto spare parts in micro, small and medium-sized industries. Many other factors collectively led to a sudden decline in the prospects of the automobile industry in the country. And as the country looks to revive it, it's clear that EVs will have to play a big role in this revolution. Here's why we think that is the case.
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At the COP26 summit, India pledged to reduce its carbon emissions to net-zero by the year 2070. The government hopes to achieve this goal with EV sales accounting for 30% of private cars, 70% of commercial vehicles, and 80% of two and three-wheelers by the year 2030. To move towards this future, the Central Government has announced various initiatives like the National E-Mobility program, which aims to provide an impetus to the entire e-mobility ecosystem. And then there's the FAME II scheme that was launched with a massive budget outlay of Rs 10,000 crores in April 2019, to support 7,000 e-buses, 5,00,000 e-three-wheelers, 55,000 e-passenger vehicles and a million e-two-wheelers. That aside, various state governments are offering their own subsidies for EV adoption as well.
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Awareness among the public is clearly on the way up. This is clearly visible in the increasing number of e-bikes and electric cars that are visible on the streets. And the large potential that this market possesses is convincing manufacturers to create the appropriate charging and maintenance infrastructure needed to cater to EVs. This, in turn, is convincing more and more people to go for such vehicles.
Another reason why EVs can revive the automobile industry of India in the near future is the abundant presence of battery manufacturers here. Players like Tata Group, Amara Raja Batteries, and Excide Industries have made heavy investments in the battery sector and some even plan to build Tesla-style giga factories for lithium-ion batteries in the near future.
There's no doubt that India is taking all the steps in the right direction when it comes to EV adoption. This will definitely help usher in a new phase for the country's automobile industry.
