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What are the Top Opportunities and Challenges for Electric Vehicles in India

Senior journalist and communication strategist, A subject matter expert on bureaucracy, governance, PSUs, start-ups and policy matter.
Feb 15, 2018 12:30 PM 6 min read

Be it the first electric superbike in India, Emflux One, Lohia Group’s three wheeler Comfort E-Auto, Ashok Leyland’s Circuit S bus powered by a smart battery, Scandinavian start-up Uniti’s futuristic 5-seater electric car or auto giant Mercedes-Benz’s Concept EQ, it was the electric, zero-emission vehicles which stole the show in this year’s Indian Auto Expo which concluded on February 14.


The marked shift towards vehicles that run on eco-friendly technologies could not have been more perfect with the Narendra Modi Government pushing for an all-electric fleet of vehicles to ply on India’s roads by 2030 – a part of its commitment made under Paris Climate Accord to cut carbon emissions, and to curb spending on oil imports which is estimated to shoot upto $300 billion by that year. Here are the top opportunities and challenges for Electric Vehicles in India.


Electric Vehicles : Challenges and Opportunities in India


Though the auto industry across the globe is gearing to walk the talk on electric mobility and power utility in India, the path is riddled with various challenges for electric vehicles in India, albeit among several opportunities.  

Opportunities and Challenges For Electric Cars in India
Tamo Racemo


Tamo Racemo
Tamo Racemo



As the ball sets rolling to achieve the target of all electric vehicle (EV) fleet by 2030, experts say that the Indian auto industry will witness a tectonic shift with start-ups or small players taking a centre stage in the sector. This was well evident in the recent Auto Expo where Bengaluru-based tech start-up Emflux Motors and Swedish auto start-up Uniti stole the show with their e-bike prototype and 5-seater electric car, respectively.


As per an estimate, India’s total EV fleet, including two-wheelers, would grow to 144 million from under 1 million by 2030.




According to US national laboratory, Lawrence Berkeley National Laboratory, EV expansion in India “will deliver economic benefits, help integrate renewable energy, and significantly reduce imports of foreign oil”.


A recently published Berkeley Lab report, "Techno-Economic Assessment of Deep Electrification of Passenger Vehicles in India", states that the generation of electric demand from EVs can bring $11 billion a year in revenue to India's financially strapped power utilities, which is “enough to cut the sector's financial deficit by at least half”. The added power demand, the report states, “could also help smooth the transition toward renewable energy as the country strives to add 100 gigawatts of solar and 60 gigawatts of wind by 2022”.




EVs could also spell the end of the internal combustion engine, thereby ending the dependency of oil for India’s transport sector.


A Niti Aayog report suggests that EV adoption could save $60 billion in fuel costs. This would also aid in cutting down as much as 1 giga ton of carbon emissions by 2030.


At present, India depends on foreign imports for over 80% of its crude oil supply. Switching to electric cars in India, the Berkeley Lab report predicts, “would substantially lessen that dependence, reducing consumption by 360 million barrels annually, or 15% of the total, by 2030. That translates to an annual savings of $7 billion (INR450 billion) a year, assuming a conservative crude oil price of $40 per barrel.”

TVS Creon - Opportunities and Challenges for Electric Vehicles in India
TVS Creon



While the flurry of opportunities and positive developments in the EV market is a cause célèbre for India, there are some speed bumps in the policy landscape which is a cause of concern.


The main hiccup is the charging infrastructure and policy in India. India reportedly has only 350 charging points at present as against 215,000 installed in China at the end of 2016. According to a media report, India will need nearly 300 charging stations in an area of 3 km once EVs become mainstream in the country. However, at a time when charging infrastructure is the need of the hour, unfortunately the regulations for electricity sales in India does not allow private players to set up charging stations. Under The Electricity Act 2003, only power distributors can offer electricity in the country.


Although there are some private charging stations in Mumbai, those are run by Tata Power, which is already a power discom. Also Ola has set up a charging station in Nagpur but it is not wholly privately owned. The home grown cab aggregator has set up the charging station in collaboration with the State-owned Indian Oil Corporation.

JBM Solaria EcoLife Bus - Opportunities and Challenges for Electric Vehicles in India
JBM Solaris EcoLife

Observers opine that given the huge number of charging stations required and the mammoth investment required for their set up, there is an urgent need to amend the Electricity Act 2003 to allow private companies get into the public power storage. At present, INR25 lakh is the cost of setting up one charging outlet.


Recently, Managing Director of state-run Energy Efficiency Services Ltd, Saurabh Kumar, had also advocated for petrol pump-like charging infrastructure, managed by public-private partnership or the private sector, to promote e-mobility in India.


In fact, a Central Electricity Authority (CEA) committee set up by the Government to suggest ways to develop EV charging infrastructure in India has recommended that public EV charging by private entities should be allowed after comprehensive review of the existing laws and regulations. CEA is the apex policy advisory body in the power sector. The panel, it is learnt, has also suggested the Government to adopt a franchise model for setting up charging stations as an interim arrangement till the time the Electricity Act 2003 is amended.   


Another policy hurdle is the requirement of distribution licence to distribute power from respective State Electricity Regulatory Commissions (SERCs). Experts opine that given the number of regulators involved, a pan-India license would make a perfect sense. 


Apart from policy issues, availability of Lithium – required for making batteries for electric vehicles – is another major issue facing the industry. India does not have any Lithium deposits and it neither a manufacture lithium-ion batteries. Most of the Lithium reserves across the globe are controlled by China, Japan and South Korea. India does not manufacture lithium-ion batteries.


Experts feel that since India needs to get into battery manufacture soon to realise its mission of all EV by 2030, it must secure the supply of Lithium from countries like Australia, Chile and Congo. 


Recently, the Government has suggested commercial use of ISRO’s Li-ion battery technology for EVs under the ‘Make in India’ initiative. The development is indeed commendable, however, at the same time, experts feel that there is an urgent need for India to invest in R&D around battery making, including in alternative technologies, because ultimately whoever controls the battery will control the EV domain. 




EV is a great opportunity for the industry and its future in India is undoubtedly bright. However, a convergence of government policy and upgrading charging infrastructure is what the country needs at the moment so that it can achieve a measure of success and does not miss the bus in the electric vehicle space in 2030.


Disclosure: Nikhil Arora, Founder & CEO of Transfin., is an investor in Emflux Motors, a Bangalore-based Electric Vehicle Startup.