Hyderabad: 

The 2025 State of India's Environment (SOE) report, published by the Centre for Science and Environment (CSE) and Down To Earth magazine at this year's Anil Agarwal Dialogue, calls it unlikely for the country to meet its vehicle electrification target by 2030. This sits in line with an earlier FICCI-Yes Bank report, which claimed that India needs almost double the adoption rate (380 bps) to achieve the EV30@30 target.

India's electric vehicle (EV) adoption rate has been on an incline, growing at an annual rate of around 200 basis points (bps) between FY21 and FY24. However, it might not be enough for the country to achieve its ambitious EV 30@30 target-- 30 per cent EV adoption by 2030.

EV Adoption in India: Current State and Projected Rate

India’s 2030 vehicle electrification target is driven by the country’s support of the global EV30@30 campaign. By 2030, the campaign aims to achieve the electrification of:

30 per cent of newly registered private cars

40 per cent of new buses

70 per cent of commercial cars

80 per cent of two- and three-wheelers

The overall EV penetration in 2024 in India reportedly stood at only 6.5 per cent. According to the International Energy Agency, the current direction of policies will lead to only 25 per cent electrification by 2035, said Anumita Roychowdhury, executive director, research and advocacy, CSE.

“While several policy strategies have taken shape to promote electric vehicles at the national and state levels, regulatory levers to propel the market have remained weak," she said.

EV Adoption: Challenges and Possible Solutions

Roychowdhury mentioned that the demand for batteries indicates the direction of the EV market. She explained that the growth of electric vehicles is primarily driven by smaller vehicles like two- and three-wheelers, which do not contribute significantly to the overall battery demand.

"The larger demand for battery development has to come from four-wheelers," she added.

She mentioned that one of the deterrents to scaling up EV sales in India has been the high purchase cost of EVs compared to internal combustion engine vehicles. She emphasised that the localisation of EVs is critical in achieving economies of scale and reducing costs. The programs to support EVs will not succeed if they do not support localised manufacturing, she added.

In its assessment of the Indian EV sector, the 2025 SOE report highlighted the absence of a manufacturing base in India, which would have otherwise helped the EV component localisation. "Localisation will get an impetus only with advances in indigenous research and development capacity," the report said.

Roychowdhury highlighted the need for a zero-emissions vehicle (ZEV) mandate. "In addition to demand incentives like the FAME schemes to build consumer demand, manufacturers also need to be given a target to sell a minimum specified number of ZEVs as a share of their overall sales in the market," she said.

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