The Government of India’s NITI Aayog and the Rocky Mountain Institute (RMI) have released a technical report that explores the potential opportunities for both the government and the automotive industry under the Faster Adoption and Manufacturing of Electric Vehicles II (FAME II) scheme. The report, titled ‘India’s Electric Mobility Transformation: Progress to Date and Future Opportunities’, measures both the direct oil and carbon savings and the possible catalytic effect that FAME II and other similar actions could have on the entire Electric Vehicle(EV) market in India.
Potential Impact of FAME II
The report suggests that if both FAME II and other engaged efforts are successful, there could be an increase in electric vehicle sales penetration reaching up to 30% for private cars, 70% for commercial cars, 40% for buses and a staggering 80% for two and three-wheelers by the year 2030. But the impact of FAME II is expected to extend beyond just those vehicles eligible under the scheme.
Energy and CO2 Savings
The lifetime of vehicles and buses covered by the FAME II will bring about significant energy and CO2 savings. In specific terms, vehicles eligible under the FAME II scheme have the potential to cumulatively save up to 5.4 million tonnes of oil equivalent, which translates to financial savings worth Rs 17.2 thousand crores.
Future Opportunities
As the year 2030 approaches, batteries are projected to remain a crucial cost driver of EVs, thus becoming a focal point for capturing potential opportunities. A synergy between the auto and battery industries could facilitate the transition to electric mobility, with collaborative efforts geared towards enhancing customer awareness, promoting domestic manufacturing, encouraging new business models and conducting research and development for EVs and their components.
Government’s Role
The government is expected to play a major role in this transition. Policies are being recommended for phased manufacturing of EVs and batteries, complete with fiscal and non-fiscal incentives. Various government departments can consider implementing a range of potential policies such as congestion pricing, low emission/exclusion zones and parking policies to drive the widespread adoption of EVs.
| EV Category | Projected Sales Penetration by 2030 |
|---|---|
| Private Cars | 30% |
| Commercial Cars | 70% |
| Buses | 40% |
| Two and Three-wheelers | 80% |
Looking Ahead
With the strategic implementation of policies such as FAME II and the willingness of the automotive industry to provide innovative mobility solutions, India’s electric vehicle market is poised for significant growth. Such a transformation promises not just economic benefits but also profound social and environmental advantages for all of India’s citizens.
