EV Penetration in India [UPSC Notes]

According to S&P Global Ratings, India’s electric vehicle penetration is far below the Asian average. In this article, you can read more about the electric vehicle (EV) penetration in India, what the government is doing to enhance it and the way forward, from the perspective of the IAS exam.

EV Penetration in India

• Globally, EV penetration is at 13.3%.
• The average EV penetration in Asia is 17.3%.
• EV penetration in other countries:
  • China leads with an EV penetration of 27.1%
  • South Korea – 10.3%
  • India – 1.1%
  • Other Asian countries like Indonesia, Vietnam, Malaysia, the Philippines, and Thailand have penetration rates ranging from 0.1% to 2.5%.
  • Japan – 2.2%
    • This low level is primarily due to the Japanese government’s support for different clean technologies, including hybrids, plug-in hybrids, fuel cell vehicles, and lithium-ion battery-powered vehicles.

Read more on electric vehicles in the linked article.

Government Targets and Current Status:

• The Indian government aims for EV penetration of 30% by 2030, but currently, 90% of EVs in India are two and three-wheelers.
• Including two and three-wheelers, except e-rickshaws, the overall EV penetration would be around 4.5%.
• The need for accelerated growth and diversification of EVs is crucial.

Dominance of Asian Countries in the Supply Chain:

• Asian countries control 98% of the battery cell supply, with China, South Korea, and Japan being major players.
• Chinese CATL and South Korean LG EnSol dominate nearly half of the global supply, with Japan’s Panasonic supplying Tesla.
• India lags behind other Asian countries in battery cell production.

Production-Linked Incentive (PLI) Scheme:

• India’s PLI scheme aims to build 50 gigawatts of battery capacity with advanced chemistry cells within the next two years.
• This scheme can potentially change the game by increasing the domestic production of battery cells.

Raw Material Opportunities:

• India has recently discovered 5.9 million tonnes of lithium in the Union territories of Jammu and Kashmir, with more reserves found in Rajasthan.
• Indonesia, the largest nickel producer globally, is investing heavily in battery-grade nickel, a key raw material for EV batteries.

Comparing EV Penetration of Major Automakers in Asia:

• Tata Motors is in the seventh spot among traditional internal combustion engine (ICE) car companies, with around 6% of their total sales coming from EVs. They aim to reach 20% by 2026.
• Japanese carmakers like Nissan, Honda, and Toyota have lower EV penetration rates of 1-3% in 2022.
• South Korea’s Hyundai and Kia have an EV penetration of 10%, while Chinese automakers Geely, Geely Auto, and Dongfeng range from 14% to over 26%.

Way forward:

• India’s low EV penetration indicates the need for significant efforts to catch up with other Asian countries. 
• Improving domestic production, leveraging raw material resources, and supporting various EV technologies are vital for India to establish itself as a significant player in the EV and supply chain sectors.

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