By our estimates, we project the vehicle stock (passenger + freight) to increase by nearly 2.7 times between the base year 2016 and the projected year 2030. We explored the consequences of 30 per cent EV sales (35 per cent in e-two-wheelers [e-2Ws] and e-three-wheelers [e-3Ws]; 30 per cent in electric buses [e-buses]; 25 per cent in electric taxis [e-taxis]; and 13 per cent in electric cars [e-cars]) in in contrast to a business-as-usual (BAU) scenario.

Figure ES1: If EVs garner a share of 30 per cent of new vehicles sales in 2030, it would result in a slew of gains

Source: Author's Analysis

In contrast to a BAU, the gains from 30 per cent electric vehicle (EV) sales in 2030 are hard to miss. With the reduction in oil demand from the passenger road transport sector, India will save on crude oil imports worth INR 1,07,566 crore (USD 14.1 billion). Further, a 17 per cent decrease in particulate matter and NOx emissions, 18 per cent reduction in CO emissions, and 4 per cent reduction in GHG emissions relative to BAU can be expected. In addition to aligning with India’s goals to reduce its oil imports and strengthening its forex reserves, the EV ecosystem presents a market size of INR 2,12,456 crore (USD 27.8 billion) for batteries, powertrains, and charging infrastructure in 2030. Under the right policy environment, supply-chain for EV manufacturing presents an attractive opportunity for future investments providing a much-needed stimulus to the economy. However, any major technological transition is fraught with losses and trade-offs. Figure ES2 highlights some of the major tradeoffs from an EV transition.

Figure ES2 EV transition includes trade-offs, the impacts of which can be staved off through prescient planning

Source: Authors’ analysis

When comparing direct jobs created in manufacturing and energy production activities in the EV sector, we find there are fewer jobs in a scenario with EVs – a reduction of 19 per cent jobs in the oil sector and ICE vehicle manufacturing combined. An EV transition plan must lay equal emphasis on new economic activities such as battery recycling (urban mining) and other services associated with electric mobility, for job creation. The central and state governments must wean away from their dependence on revenues linked to petroleum consumption, in order to limit perverse incentives that sustain policy support for ICE vehicles, and help accelerating EV adoption in India. As is evident form Figure ES1 and ES2, the gains from the transition to electric mobility overshadow potential losses.

In a post-COVID world, India needs to take a series of measures to propel economic growth and sustain it in the long term, focusing also on creating jobs. We turn our gaze to the auto-industry and pitch for a shift in manufacturing from internal combustion engine (ICE) vehicles to electric vehicles (EVs). We analyse the impact of this shift on India’s economic recovery: will it be beneficial or will it be detrimental?

The terrain we traverse to understand the impact of this shift is a two-fold scenario projection encompassing a 10-year horizon:

• Projecting vehicle stock and energy demand for road passenger transport in 2030.

• Mapping and quantifying the impact of the electric mobility transition on various sectors of the Indian economy under different mode-share scenarios. Our key comparative scenario assumes a 30 per cent sales share of EVs in 2030.

We specifically look at the impact of EV transition in terms of opportunities created in the form of reduction in oil import bill, jobs generated, new markets and industries created, improvement in air quality, and reduced greenhouse gas (GHG) emissions. Simultaneously, we foresee a loss in value-addition from some existing industries resulting in reduced jobs in specific activities and also a reduction in government revenues as a result of a drop in the collection of taxes arising from fossil fuel (petrol and diesel) consumption. Any major technology transition is fraught with losses and gains, some of which persist in the short term while others remain over the long term. Our goal in this study is to bring the major considerations to the forefront, for the attention of policymakers and the auto-industry when examining an EV future for India. If the EV sector turns out to be promising for economic recovery, the analysis we present can be used to draw a roadmap that curtails losses and leverages gains from the transition.

Our research is limited to an analysis of motorised road passenger vehicles, battery electric vehicles using lithium-ion battery technology, and conductive point charging unless otherwise specified.

1.1 Background

India’s transition to electric mobility is guided by three main imperatives—energy security, curbing local air pollution, and curtailing GHG emissions from the transport sector. A major transition in transportation technology concerns not just the automotive industry in India but also other sectors with which it has forward and backward linkages: petroleum production, electricity generation, electronics manufacturing, and even public finances on account of change in oil import bill and fuel-tax revenue (ILO 2018). So far, there has been no clear policy mandate for EV penetration. But policymakers in India have set a goal of 30 per cent penetration of EV in new sales by 2030 (Clean Energy Ministerial 2017; PIB 2018). The range of impacts associated with increased deployment of EVs on the economy are captured in Figures 1 and 2.

Figure 1 EV transition rings in cumulative benefits on the economy.

Source: Authors’ adaptation from Cambridge Econometrics. 2015. “Fuelling Britain’s Future”

Figure 2 The energy sector is likely to see a paradigm shift due to EV transition.

Source: Authors’ adaptation from Cambridge Econometrics. 2015. “Fuelling Britain’s Future”

For constructing the future EV scenario, we start by projecting the travel demand expected in 2030 and the number of vehicles needed to cater to that demand. Then we factor in the number of EVs that could be part of the vehicle mix. Although the main objective of our study is to estimate the impact of an EV transition on the economy, we also gathered a diversity of views on what the mobility future will look like (shown later in Figure 9). In doing so, we undertook an independent bottom-up assessment of mobility demand in the future and state the assumptions driving this demand. Mobility demand in future years is driven to a large extent by the ‘mobility paradigm’ and how it is being served. Mobility paradigms are characterised by mode-shares, which can influence the energy footprint of the transport sector and have implications on congestion and road safety.

Reliable travel demand projections for India are often limited by the absence of disaggregated demand-side data for the transport sector. This includes data required to estimate passenger kilometres travelled (PKM), freight-tonne kilometres (TKM), and the share of vehicle fuel technology in transport, among others (Paladugula et al. 2018). PKM is typically derived from on-ground surveys to estimate the total distance travelled by various modes and load factors. The Census 2011 captured PKM for worker individuals, which could represent at best 35–42 per cent of passenger travel demand in the country.

Aggregated data throws up a bundle of contradictions. As per data from the Ministry of Statistics and Programme Implementation (MoSPI), the road-transport sector consumed about 31 million tonnes of oil equivalent (Mtoe; 12 per cent) of oil in FY18 out of the 262 Mtoe of oil supplied (domestic production + import) in that year (MoSPI 2019). However, using the fuel supply data of the Ministry of Petroleum and Natural Gas (MoPNG), we estimate the fuel consumption for road transport to be around 84 Mtoe (33 per cent) out of a total of 256 Mtoe supplied (MoPNG 2020; PPAC 2013).2 Here, we assume the MoPNG data to be more reliable since it is derived from actual fuel sales. We also compared road-transport fuel consumption estimates derived from the underlying PKM estimates available from the Ministry of Road Transport and Highways (MoRTH) for FY17 with supply-side data from MoPNG for FY17. Here we find that this estimate is significantly higher (approximately by 60 per cent) than roadtransport fuel consumption estimated based on the MoPNG fuel sales reports.

The total registered vehicles in India stood at 280 million as of 2017 going by the MoRTH statistics (MoRTH 2019). The actual number of on-road vehicles wouldn’t match this figure, as the transport departments in respective states don’t mandate a vehicle de-registration process. The estimates for privately owned on-road vehicles, therefore, tend to be inaccurate. Surveys have revealed that official statistics overestimate the number of in-use vehicles by as much as 120 per cent (Goel et al. 2016). Hence, historical data on vehicle stocks in India have to be discounted for retired vehicles. Out of three union ministries that could make available data for decision-making on the future of road transport, only one—MoPNG—provides reliable information but lacks the disaggregation needed for robust projections.

1.2 Electric Mobility in India​

A total of 5,30,560 EVs (including electric two-wheelers [e-2W], electric three-wheelers [e-3W], electric rickshaws [e-rickshaws], electric cars [e-cars], and electric buses [e-buses]) were sold in India (CEEW - Centre for Energy Finance 2020). This remains far from the National Electric Mobility Mission Plan (NEMMP) 2020 target of 6-7 million EV and hybrid sales by 2020. However, there is a steady uptick in the sales of EVs since 2017 as shown in Figure 3. A number of high-voltage electric cars were launched towards the end of 2019 and many more models showcased at the Auto-Expo 2020 were being readied for launch, including Tata Altroz EV, Mahindra eKUV100, and MG Marvel X (Carandbike 2020). The unexpected outbreak of the COVID-19 pandemic and its fallout has disrupted the global supply chains for EV components, mainly power electronics, battery, and the minerals that are used in these components (Wood Mackenzie 2020). The supply chain disruption has cast its shadow over the entire auto-industry, not just the EV sector (ETAuto 2020). The blossoming EV industry in India stares at an unclear future, as experts are divided on how the EV sector will eventually emerge out of the present situation: some have forecast stagnation while others see a possibility of the Indian EV sector becoming a strong contender in the global electric mobility manufacturing space (Panday and Ghosh 2020; Inc42 2020). Policy directives such as Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles Phase II scheme (FAME II scheme) and Phased Manufacturing Plan have been issued with a clear intent to transition to EVs. But the economy-wide impacts and environmental benefits of an EV transition have not been sufficiently studied in depth. Barring a few policy announcements, the government has not come out with a clear roadmap. A comprehensive policy roadmap and target for EV sales leading up to 2030 is found wanting.

Figure 3 EV sales in India have grown by at least nine times in four years.

Source: Sharma, Yogima. 2019. “Your Electric Vehicle Dream May Get a Rs 50,000 Jump-Start”; Overdrive. 2016. “Electric Vehicle Sales Reach 22,000 in India in FY 2015–16”; Frangoul, Anmar. 2020. “Electric Vehicle Sales in India Jump, with TwoWheeled Scooters Driving Growth”

For our projections, we explore three ‘marker’ scenarios compared to a business-as-usual (BAU) situation by 2030. These three scenarios we assume have (i) high public transport share, (ii) high private vehicle share, (iii) and high shared mobility. While a change in mode-share is partially influenced by economic growth (and associated paradigms), in our scenarios, we assume that it is mainly the outcome of mobility policy and behaviour change interventions. We characterise these marker scenarios by keeping overall passenger travel demand and the gross domestic product (GDP) constant between scenarios. We have taken a cue from a few studies that explore such scenarios, although keeping these two variables constant is a limitation of our research. To exercise control over the combination of underlying assumptions and to create the aforementioned scenarios, we developed a vehicle stock model. Based on outputs from our vehicle stock model, we further estimate fuel consumption in these three scenarios.

Using the projected vehicle stock in 2030, we estimate passenger and vehicle kilometres travelled (PKM and VKT) under various future scenarios for mobility in India. Our core focus though lies in the comparison between a BAU and a 30 per cent EV sales scenario (EV30), retaining mode-shares as BAU but involving a change in the fuel mix. We also contrast scenarios where a 30 per cent EV penetration is achieved under different mode-shares in serving the projected passenger travel demand, against the BAU. However, we assume occupancy ratio, vehicle ownership vs usage and average trip lengths to be constant, in the absence of robust data. This being another limitation to the study and hence estimates in all three scenarios remain conservative.

In this section, we lay out our results on vehicle stock projection and energy demand under our assumed scenarios. We then go on to elaborate using data the impact of the projected EV transition on oil imports, government revenues, employment, environment and climate, as well as the market opportunity. We assume a 30 per cent EV sales by 2030 in accordance with the government’s target. Our main comparisons in this section are between the BAU and EV30 scenarios unless otherwise specified.

3.1 Vehicle stock in 2030​

We estimate vehicle ownership in India to reach 80 per 1,000 people for all vehicles (passenger + freight) excluding 2Ws as per the vehicle stock model. Inclusive of 2Ws, the vehicle ownership will be at 259 vehicles per 1,000 people. As per our projections, even in 2030, vehicle ownership levels in India would be much lower compared to the rest of the world. For instance, in 2016, vehicle ownership in Brazil stood at 330 per 1,000 people and that in South Korea at 424 per 1,000 people as per available data (MoRTH 2018).

Figure 7 Two-wheeler ownership is projected to increase by about 2.2 times and vehicle ownership for all other road vehicles by 2.9 times in 2030 compared to 2016

Figure 7 cont...Two-wheeler ownership is projected to increase by about 2.2 times and vehicle ownership for all other road vehicles by 2.9 times in 2030 compared to 2016

The total stock of vehicles (passenger + freight) goes up by 165 per cent compared to 2016 (base year), driven by growth in GDP per capita and population. We derive the total passenger demand in billion passenger kilometres (BPKM) in 2030 from the vehicle stock (Figure 8). This requires us to assume a certain change in mode-share based on the methodology described in Annexure I.

Figure 8 Passenger travel demand is estimated to increase by about 1.9 times between 2020 and 2030

Source: Authors’ analysis

On-road stock (million vehicles) 3.1.1 Comparison with existing estimates

We compared the PKM, energy demand, and stock estimates against the existing projections (Figure 9 and 10). We find our estimates to be more closer to estimates from the recent studies such as those from The Energy and Resources Institute (TERI) and NITI–RMI (Spencer and Awasthy 2018; NITI Aayog and Rocky Mountain Institute 2017a). Differences in modelling paradigms and exclusion of taxis among road transport vehicles in the case of the CEEWGCAM (global change assessment model) estimate for instance contributes to the variation from our estimates.

Figure 9 A comparison of projected passenger travel demand and energy demand in 2030 by various models with our estimate.

Source: Authors’ compilation and analysis

Figure 10 Comparison of stock projections for 2030 between NITI-RMI and this study’s estimate.

Source: Authors’ compilation and analysis

3.1.2 Sensitivity analysis

We also carried out sensitivity analysis for vehicle ownership projection and energy demand estimation separately (Figure 11). Since 3Ws include a significant share of petrol, diesel as well as compressed natural gas (CNG) vehicles in the stock, we carried out sensitivity analysis for estimating energy demand for only 3Ws based on our assumptions. The sensitivity of mode-shares and EV penetration to energy demand is already captured in the scenarios explored in our study. Assumptions around saturation levels have a major influence on the estimated vehicle ownership whereas assumptions impacting load factor can lead to substantial variation in estimated energy demand.

Figure 11 Vehicle ownership projections in 2030 are sensitive to the saturation level assumption.

Source: Authors’ analysis

3.2 Fleet of 2030: the many futures.

We further apportioned the total travel demand into mode-share under various scenarios relative to the BAU as shown in Table 1. The multiple mode-share scenarios that may evolve in future are assumed to be a consequence of policies, investments, and behavioural change interventions that prioritise specific modes over others to meet the same travel demand. These mode-shares, in turn, lead to various levels of fuel consumption by the transport sector as presented in Figure 12. As is evident, a high public transport scenario results in the lowest fuel consumption among all the scenarios and about 17 per cent lower than the BAU. At the other end of the spectrum, a high private vehicle scenario results in 17 per cent more fuel consumption compared to BAU.

Figure 12 A high public transport scenario has about 17 per cent lower fuel consumption compared to BAU in 2030

Source: Authors’ analysis

The different mode-shares result in changes to the overall vehicle stock number (see Figure 13). The change in the number of vehicles for a particular scenario is directly attributed to the effect of substitution. For example, the PKM demand met by one additional bus is equivalent to PKM demand otherwise fulfilled by 269 motorbikes. Thus, we observe a 57 per cent reduction in the total number of passenger vehicles in a high public transport scenario compared to a high private vehicle scenario.3 This has important implications beyond the auto-industry, on traffic congestion, air pollution, and parking issues.​

Figure 13 On-road stock in a high public transport scenario would be about 57 per cent lower compared to a high private vehicle scenario in 2030

3.3 Outcomes of a 30 per cent EV penetration in 2030

We then explored the outcomes of 30 per cent EV sales under each of the assumed scenarios as shown in Figure 14. Unsurprisingly, we find that energy consumption is highly reduced under high public transport and high shared mobility scenarios (27 per cent and 20 per cent respectively). While fuel consumption benefits are comparable for both these scenarios, but in case of a high public transport scenario, there would be 24 per cent fewer passenger vehicles on road compared to a high shared mobility scenario in 2030. Considering the benefits of better road-space use, lower parking space requirements, and reduced traffic congestion, a high public transport scenario is the preferred mobility scenario for India by 2030.

Figure 14 Energy demand is about 12 per cent lower in case of 30 per cent EV penetration compared to a BAU scenario in 2030

Source: Authors’ analysis

3.4 Assessment of economy-wide impacts

Among the many measures to revive the economy in the aftermath of COVID-19, electric mobility should be prioritised as a key sector for India’s economic recovery and sustainable growth. In an EV30 scenario, the domestic value-add generated in manufacturing, reduction in oil import bill, and environmental and health benefits far outweigh the loss in valueaddition from the petroleum and automotive sectors as shown in Figure 15.

When comparing direct jobs, there are more jobs lost than created in the transition. However, assessment of job creation only considers direct manufacturing jobs associated with EV powertrain, batteries, and charging infrastructure and jobs in the electricity sector. Direct jobs from activities such as installation and operations, charging infrastructure, battery recycling, telematics, and other service-related jobs and indirect jobs have not been taken into account. But we suggest that the EV roadmap for India should identify activities beyond manufacturing within the EV value chain for job creation.

If EVs garner 30 per cent of vehicle sales by 2030, the central and state governments are set to lose revenue from petrol and diesel taxes by 15 per cent compared to BAU. When pushing for EV transition, the government’s plans should also include diversification of revenue sources.

Figure 16 A 30 per cent EV transition by 2030 will come with its own set of trade-offs.

Source: Authors’ analysis

3.4.1 Impacts arising from the change in oil consumption

In FY19, the oil consumption from road transport stood at 91 Mtoe, with diesel making up 66 per cent of this consumption. Petroleum imports constituted nearly one-third of India’s total imports in value terms and the country imported 87 per cent of its domestic consumption of crude oil according to provisional estimates (MoPNG 2020). The government has therefore set a target of reducing oil import by 10 per cent by 2022 (PIB 2020). Electric mobility and limiting private vehicle ownership hold key to achieving this target.

Oil import bill (INR crore) Reduction in oil import bill​

The total savings in oil import bill under assumed scenarios range from INR 1,07,566 crore (USD 14.1 billion in 2020 prices) to INR 2,16,043 crore (USD 28.3 billion) as presented in Figure 16.4,5 For comparison, India’s trade deficit in FY20 stood at INR 11,57,108 crore (USD 153 billion) (Suneja 2020).

It is worth noting that, in an EV30 scenario, the oil import bill drops by 15 per cent compared to BAU, while in the case of High PV–EV30 (high private vehicle ownership and 30 per cent EV penetration) scenario, the oil import bill exceeds BAU by 4 per cent. Lower private vehicle ownership, coupled with promotion of electric mobility, would effectively bring down passenger transport energy demand. We find that, in our analysis, the biggest savings in oil imports can be realised from scenarios that combine higher shares of public transport and shared mobility with a penetration of electric vehicles.

Figure 17 Oil import bill to the exchequer is the about 31 per cent lower in a scenario with high public transport modeshare and 30 per cent EVs in 2030.

Source: Authors’ analysis

Reduction the petroleum tax revenue of central and state governments​

While the intent is to bring down the consumption of petrol and diesel through changes in mode-share and fuel mix (Figure 18), it also has to be borne in mind that the petroleum sector is a significant contributor to revenues for the centre and states in the form of taxes and dividend income. The total revenue realised from taxes on petrol and diesel was INR 5,76,000 crore in FY19, with 60 per cent of these revenues going to the centre and the remaining to the states (PPAC 2020). Tax on fuel constitutes 15–20 per cent of tax revenue for the majority of the states (RBI 2019). Hence, we explored how changing petrol and diesel consumption levels could impact central and state government revenues in 2030.

Figure 18 The consumption of petrol and diesel is highest in the high private vehicle mobility scenario and lowest in the high public transport mobility scenario.

Source: Authors’ analysis

The central government would lose 15–31 per cent of potential petroleum tax revenues (otherwise obtained in a BAU scenario) in 2030 in multiple scenarios we assume for 2030 (Figure 18). The combined state government revenues from petroleum tax could dip by 15–33 per cent under various scenarios compared to BAU. On the other hand, in a high private vehicle scenario, the central and state governments, respectively, gain a revenue of 4 and 8 per cent in the form of fuel taxes. The loss or gain in fuel tax revenue, which is a reflection of consumer spend on petrol and diesel, should be viewed from a larger macroeconomic context. The consumer spending less on fuel is left with a higher disposable income, which, in turn, is expected to increase the consumption of other goods and services in the economy (Cambridge Econometrics 2015).

Figure 19 Central and state governments would incur a loss of 15 per cent in revenue from the sale of petrol and diesel in an EV30 scenario relative to BAU.

Source: Authors’ analysis

Assuming current electricity duty rates, revenues generated from increased electricity consumption from EVs will be limited, as shown in Figure 20.7 While pushing for penetration of electric vehicles, both central and state governments need to devise strategies to reduce its impact on their own revenues and wean away from excessive dependence on revenues linked to petroleum consumption.

Figure 20 Electricity duty revenue increases manifold in various EV30 scenarios compared to BAU.

Source: Authors’ analysis

Figure 21 The total cost of ownership of electric vehicles is expected to decrease by 9-20 per cent compared to their ICEV counterparts in 20308

Source: Authors’ analysis

3.4.2 Impact on employment under various scenarios

In the course of transition to electric mobility, new high-skilled jobs in the manufacturing of batteries, EV powertrain, and charging infrastructure are likely to be created. Additional consumption of electricity will drive job creation in the power sector. Simultaneously, reduced consumption of oil would lead to a reduction in jobs created in the petroleum sector and in internal combustion engine (ICE) vehicle manufacturing. However, it’s important to factor in the job intensity of each of these activities in the economy (see Figure 22). The petroleum value chain (refining, processing, wholesale, and retail) creates the least number of jobs per INR 1 crore of output value-added.

Figure 22 Job intensity is the lowest in oil production and highest in ICE car powertrain manufacturing.

Source: Authors’ analysis

In a 30 per cent EV scenario, around 1,21,422 jobs would be created across the EV value chain in 2030 (Figure 23). This figure includes jobs created in battery, powertrain, and charging infrastructure manufacturing as well as jobs in the electricity sector11 due to increased electricity consumption by EVs.

Figure 23 About 1.2 lakh jobs in the EV12 value chain are expected to be created in an EV30 scenario.

Source: Authors’ analysis

If the EV transition at EV30 is realised by 2030, it is likely to result in a reduction of 19 per cent of jobs (1,57,448) in the petroleum13 and automotive (ICE vehicle) sectors as shown in Figure 24. We do not tally the net jobs created, as the current analysis only accounts for direct jobs. We don’t factor in jobs that are likely to be created in battery recycling, installation, and operation of charging infrastructure, and other EV-related services. It is relevant to note that macroeconomic modelling studies accounting for both direct and indirect jobs conducted in countries such as Italy, Britain, and Spain (economies with oil-import dependencies) have concluded that there is a net job creation from a transition to EVs on account higher domestic value-addition and investments as against BAU (Cambridge Econometrics 2015, 2018b, 2018a).

Figure 24 In multiple EV30 scenarios, 19–49 per cent of jobs are likely to be lost in the petroleum sector and ICE vehicle manufacturing activities compared to BAU.

Source: Authors’ analysis

The EV transition dynamics also portend bleak prospects for the traditional ICE vehicle-based automotive and petroleum value chain. Jobs will be lost in this value chain irrespective of whether net jobs are created. It is not clear, however, whether the current capacity expansion plans in automotive and petroleum sectors factor in the impacts of EV penetration scenario which could reduce economic utility and jobs that the two sectors would support in future (with the risk of assets being stranded). As the EV sector scales up, the new jobs created in the EV value chain would require imparting training and skilling to create a workforce that can cater to the needs of EV manufacturing as a prerequisite to meet any anticipated demand for EVs. So, a sound transition plan to identify sectors and activities where fewer jobs would be created in future to abate the adverse impacts and train the existing workforce for new jobs that would be created is very essential for the EV sector to thrive.

3.4.3 Market size for EV components and charging infrastructure in 2030

We further explored the market opportunity created by a demand for EVs in various scenarios that could infuse additional investments into the economy. Specifically, we looked at market size14 for batteries, powertrain, and charging infrastructure.

We estimate that the market size for batteries (for e-2Ws, e-3Ws, e-cars, and e-buses combined) in an EV30 scenario would be INR 53,632 crore (USD 7 billion)15 while that for charging infrastructure would be about INR 13,372 crore (USD 1.8 billion) in 2030. For e-2Ws, e-3Ws, e-cars, and e-buses, the combined market size for electric powertrain amounts to INR 1,45,452 crore (USD 19.1 billion)16 in 2030. In 2019, the market size of the Indian appliance and consumer electronics stood at INR 76,400 crore (USD 10 billion) and is expected to reach INR 1.48 lakh crore (USD 21.8 billion) by 2025 (IBEF 2020). The market size for batteries, powertrain, and charging infrastructure (components with significant share of value-add from electronics) taken together is likely to match the scale of consumer electronics market by 2030 (Figure 25 and 26). Domestic manufacturing of these high value-add components holds the key to capitalising on the market opportunity created.

Figure 25 A 30 per cent EV sales scenario is likely to create a market opportunity of more than INR 2 lakh crore (USD 26 billion) for EV powertrain and batteries in 2030

Source: Authors’ analysis

Figure 26 A 30 per cent EV sales in 2030 is likely to create a market size of about INR 13,372 crore (USD 1.8 billion) for public charging infrastructure.

Source: Authors’ analysis

3.5 Emissions

Although a high personal vehicle scenario by 2030 brings in additional fuel tax revenue to the government and generates employment, a large presence of vehicles on road leads to higher local air pollution in Indian cities. We projected the levels of particulate matter (PM2.5), carbon monoxide (CO), nitrogen oxide (NOx), and greenhouse gas (GHG) emissions in 2030 to gauge the impact of change in mode-share and EVs (Figure 27).

As expected, a high personal vehicle mobility scenario spikes up local air pollutants, with a 25 per cent increase in CO emissions, 14 per cent higher NOx emissions, and 18 per cent higher PM emissions compared to BAU.17 This scenario also results in a 17 per cent higher GHG emissions compared to BAU.18 In contrast, in an EV30 scenario, the GHG emissions go down by 4 per cent, PM and NOx emissions reduce by 17 per cent, and CO emissions shrink by 18 per cent. The largest reduction in GHG emissions (20 per cent) is achieved in a scenario that combines 30 per cent EV sales with a higher mode-share of public transport. Further, major cities in India are already choked by congestion. According to a Boston Consulting Group (BCG) study, the total social cost of congestion from four large cities—Bengaluru, Mumbai, Delhi, and Kolkata—alone amounted to INR 1.68 lakh crore (USD 22 billion) (BCG 2018). India has the highest number of road accident deaths as per the 2018 World Road Statistics report, which compared 199 countries and about 1.5 lakh lives in India were lost in 2018 alone (MoRTH 2018). A predominantly private motor vehicle scenario, apart from polluting the environment in India, also exacerbates costs to the society in the form of congestion and road safety issues.

Figure 27 Higher private vehicle ownership pollutes the environment in Indian cities while shared mobility and high public transport usage lower the emissions of pollutants.

Source: Authors’ analysis