There is a remarkable shift that is happening in India. The country’s uptake of electric vehicles is impressive. But when we say EV, it is not the images of Elon Musk’s Tesla that come to mind in wealthier economies, but two-wheeler or three-wheeler ones.
According to The Economist, more than 70% of all vehicles in India are two-wheeler scooters and motorcycles, and three-wheeled autorickshaws account for another 10 per cent.
These two types of vehicles, considered chariots of the middle class, represent 92% of EVs registered in India, and the uptake rate is only expected to increase.
The article notes that rapid EV uptake growth in India results from government incentives for producers and consumers.
“In 2013, the then Congress-led government launched the first national scheme—the National Electric Mobility Mission Plan—to push EVs. Two years later, Narendra Modi, then the prime minister, launched a demand-incentive scheme known by the acronym fame, with an expanded second phase in 2019. Most state governments subsidise purchases, too.”
The IEEFA reports that the government plans to invest $30 billion in new transmission infrastructure to connect renewable generation as it aims to triple its clean-power capacity by 2023.
A lack of transmission lines has held back renewable electricity in India. Their power ministry announced that investment would pay for solar plants in India’s sun-drenched deserts of Rajasthan and Gujarat and wind farms in Tamil Nadu to the national network. This will help grow the country’s inter-regional transmission capacity from 112 gigawatts to 150 gigawatts by the decade’s end.
“The transmission plan includes building transformers and high voltage lines to carry power long distances, as well as laying submarine cables to ship electricity from offshore wind projects.”
The increase in EV uptake in India could help the country reduce its crude oil imports, currently at over 85%, and account for 24% of its import bill in 2021-2022.
Aside from slashing its import bill and energy dependence, the rising number of EVs on India’s roads could also bring major health benefits as internal combustion engines emit a deadly pollutant known as PM2.5. This fine particle can get into the deep parts of the lungs and even into the bloodstream.
According to The Wire, Indian cities filled 12 of the top 15 cities with the most polluted air in the world. By population, India’s average PM2.5 concentration, measured in micrograms per cubic meter (μg/m3), in 2022 was 53.3 – against the WHO’s recommended annual guideline level of 5 μg/m3, a significantly large discrepancy. Roughly 60% of cities in India experienced annual PM2.5 levels of at least seven times higher than the WHO guideline, where 20-35% of it comes from the transportation sector, according to a report by Swiss technology company IQAir.
Long-term exposure to these particles is associated with increased rates of chronic bronchitis, reduced lung function, and increased mortality from lung cancer and heart disease (Department of Health, 2018).
India’s analysts and industry experts say that the country’s speedy uptake of EVs can push it to peak its fuel demands earlier than expected.
“We were anticipating that peak gasoline demand will be around 2040-2045 earlier but going by the trend and the speed with which we are developing the ecosystem around EVs, the peak demand would be the mid-2030s,” Debasish Mishra, Partner, energy, resources and industrials, Deloitte India told Reuters (Narayan, 2023).
Although the country is behind European and Asian countries in adopting electronic vehicles, India is catching up. Not only that but its investment in the production of new autos and energy infrastructure is accelerating, Reuters reports.
Future projections of decreased oil demand caused by the high uptake of EVs have the country’s oil refineries gearing to integrate petrochemical investment to cope with the potential losses in fuel demands.
The report says India’s largest refineries are investing billions of US dollars to raise petrochemical capacity. This shift could also lessen their dependence on China which currently provides 90% of the country’s petrochemical needs.
Forget Teslas, India’s EV revolution is happening on two wheels. (2023, April 20). The Economist. Retrieved from https://www.economist.com/asia/2023/04/20/forget-teslas-indias-ev-revolution-is-happening-on-two-wheels?
India to invest $30 billion in new transmission infrastructure to bring renewable energy to market. (2022 December 8). Institute for Energy Economics and Financial Analysis. Retrieved from https://ieefa.org/articles/india-invest-30-billion-new-transmission-infrastructure-bring-renewable-energy-market
Narayan, M. (2023, January 27). Analysis: India’s rapid take-up of electric vehicles prompts rethink about long-term fuel needs. Reuters. Retrieved from https://www.reuters.com/world/india/indias-ev-dawn-fans-expectations-fuel-demand-may-peak-early-2023-01-27/
Fine Particles (PM 2.5) Questions and Answers. (2018, February). NY State Department of Health. Retrieved from https://www.health.ny.gov/environmental/indoors/air/pmq_a.htm#