In FY 2023, a million electric vehicles (EVs) hit the roads nationwide.

But to drive its EV transition, India needs to weigh the pros and cons.

Exhaust-free EVs are greener and can improve our collective health by addressing air pollution.

The transport sector emits 272 million tonnes of carbon dioxide across India.

Source: CEEW Analysis

India has announced an EV30@30 target to add 30% EVs to its new vehicle sales by 2030.

This could reduce particulate matter (PM) and nitrogen oxides (NOx) emissions by 17%.

EV30@30 also has the potential to reduce India's crude oil import bill of about over USD 94 billion by 15%.

Battery, powertrain and charger manufacturing for EVs can bring in USD 27.8 billion.

Source: CEEW Analysis

But India's EV transition faces many challenges.

The Union and state governments could have an estimated loss of over USD 14.1 billion in revenue from reduced petrol and diesel sales.

To balance this, the government should implement alternate taxes, such as distance-based taxation.

This can counter revenue loss and promote public transit.

The EV transition faces perceived manufacturing job loss and hesitation in adopting new technologies.

The overall manufacturing-related direct job loss can be averted as more jobs get added in EV battery and charger manufacturing.

Source: CEEW Analysis

A large awareness campaign is needed to combat behavior biases for not choosing EVs.

This includes risk-averse attitude, the perceived sunk-cost fallacy of current vehicles, and passengers overvaluing their rare long-distance trips.

To maximise the benefits of the EV-led tech transition, the government must consider policy reforms in taxation and promote public transit.

India should also prioritise standardisation & specifications in procurement.

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