It is critical for any country to have appropriate energy security in a sustainable and scalable manner in order to become a worldwide economic power in the modern world. India has set out on an ambitious mission to electrify its transportation system. This shift in strategy will help India meet its climate change objectives while also creating job opportunities in the EV manufacturing sector.
India is presently the world's fifth largest car market, and the country's expanding economic status is predicted to make it the third largest in the coming years. By 2030, around 40 crore Indian clients are projected to seek mobility solutions. In order to meet this demand in a way that is consistent with the country's environmental goals, India will have to embark on an electric vehicle revolution.
Fuel prices are at all-time highs, and Indian cities, including the capital, have the dubious distinction of constantly ranking among the world's most polluted cities in terms of air quality.
At the same time, continuous urbanisation is occurring, causing cities to grow further into the countryside. As a result, electric mobility is being hailed as the solution for achieving growth targets without suffocating cities. The government of India's first and most important target is to convert 30 percent of new vehicle sales to electric vehicles by 2030, lowering carbon emissions by a billion tonnes and attaining total net-zero by 2070.
This push for electric vehicles will result in a cleaner, greener future, as well as a significant contribution to India's energy security. India now imports more than 80% of its crude oil, and as illustrated by the current situation, this supply chain is vulnerable to disruptions and international meddling. We will be able to eliminate our reliance on oil for mobility, as well as enhance the system and enable more renewable energy generation through secure and stable power grid operations, thanks to electric vehicles.
Although electric vehicles account for less than 1% of all vehicle sales in India, the sector is rapidly expanding in all vehicle categories. EVs will undoubtedly be the future of mobility in India as efficiency and battery affordability are improved through initiatives such as Battery as a Service solutions. India's EV battery consumption is estimated to reach 900-1100 GWh by 2030. Battery manufacture in the United States will be critical in supplying this demand.
India's domestic battery consumption is currently entirely reliant on imports. Even if EV penetration is nearly non-existent in India, the import of lithium-ion cells would cost the country over $1 billion in 2021.
The Indian government is aware of the situation and is taking initiatives to encourage the EV ecosystem and public adoption of these vehicles. FAME (Faster Adoption and Manufacturing of Electric Vehicles) and FAME II (10,000 crore) consumer schemes, as well as the production linked incentive scheme for the Advanced Chemistry Cell (ACC) (Rs 18,100 crore) and the PLI scheme for Auto and Automotive Components (Rs 25,938 crore) to manufacture EVs, are some of the major initiatives.