Making environmentally friendly choices has become an absolute necessity today. With rising awareness on global warming and escalating prices of crude oil, nations are aggressively seeking alternative and clean energy options for meeting human needs. Transportation accounts for the largest consumption of natural oil reserves worldwide. In response to the looming crisis of global warming, the Automotive industry across the globe is driving a paradigm shift towards electric mobility and nations and consumers are quickly adopting the changes.  


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At the COP26 Summit, India committed to an aspirational goal of having at least 30% of private vehicles as Electric Vehicles (EVs) by 2030. This is an uphill task for the Indian Automotive industry, which is the fifth largest in the world, considering that the EV sales accounted for a mere 1.3% of the total sales in 2021. 


Also read: Cost of electric vehicles to be at par with petrol-run vehicles in 2 years


Though in its nascent stage, the EV market in India is expected to reach USD 206 B by 2030 as per CEEW-CEF. Consistent strategic interventions by various stakeholders are crucial to achieve this growth in EV space and various stakeholder groups are driving this agenda aggressively. 


Firstly, the conventional automotive players and oil companies are making huge investments to propel EV demand. To mention a few, in year 2021, Indian Oil Corporation announced its plans of installing 22,000 EV charging stations over 3-5 years; Skoda announced its plan to locally manufacture EVs in India; Hero Motor entered a JV partnership with a Japanese firm, Yamaha, to manufacture electric motors for e-bicycles for the global market, and Mahindra announced its 3-year plan of investing Rs. 3,000 Cr in its EV business.  


Secondly, the Government of India has been rolling out out several initiatives to promote growth of electric mobility, such as 100% FDI through the automatic route in EV space, incubation programs, shared facilities for prototyping and small scale manufacturing, financing support through Credit Guarantee Scheme for Startups (CGSS), tax rebates and subsidies for buyers.


The roll out of Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME) schemes and Production Linked Incentive (PLI) schemes to foster indigenous supply chains including those for lithium-ion cells will bring down production costs. The latest Budget 2022 includes investment plans for the EV Sector up to USD 14.5B to foster component manufacturing as well as creating robust charging infrastructure, such as public and private charging points, battery swapping stations to negate problems of anxiety and long waiting time for commercial users etc.  


Also read: Tesla becomes world's most trusted automaker of self-driving cars


Thirdly, there is an uptake of investments in the startup ecosystem driving innovation. According to a research, in 2021, EV-tech startup funding hit an all-time high of nearly USD 444M (255% higher than that in 2020). Prominent deals included Ola Electric (USD 253M), BluSmart (USD 24.8M) which started with seed funding from Mumbai Angels, Simple Energy (USD 20.8M), Revolt Motors (USD 20M) and Detel (USD 20M).


In the past, EV startups have also attracted investments from development finance and climate finance agencies, such as ADB Ventures, International Finance Corporation (IFC) and Green Growth Equity Fund. The EV ecosystem in India comprises approximately 500 startups spread across the EV value chain of which 63% of the startups are focused on manufacturing alone.


About 20% of them focus on charging infrastructure and the rest focused on services related to battery solutions, conversion kits, urban logistics and EV financing. The investment opportunities in EV space triggered by the favourable government policies have seen the numbers and the scope of the startups increase over a period.  


India’s concentrated efforts to drive shared, electric and connected mobility can help us as a nation to save one giga-tonne of carbon dioxide emission by 2030. Despite its best intentions and efforts, the target looks far-fetched to be achieved as the CEEW-CEF study estimates a cumulative investment requirement of over USD 180B in vehicle production and charging infrastructure to be able to attain growth projections of 2030.


The accelerated focus on ramping up the infrastructure, adapting to climate change and the associated investment needs, positions this sector as an attractive destination for investment, transformation and wealth creation. 


This article is authored by Nandini Mansinghka, Co-Founder & CEO of Mumbai Angels. All views are personal. 


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