While reasonable progress has been made through various initiatives so far, the target is far away.Decarbonising India’s mobility sector is crucial to achieving arguably steep climate goals. The automotive industry is one of the major contributors to greenhouse gas (GHG) emissions, particularly carbon dioxide (CO2), which is a major focus area of the climate-change fight.
In India, the transport sector accounts for ~12% of GHG of which, road transport emits 90%. The Indian Railways is largely electrified, while the share of coastal and inland waterways is very low.
By the end of this fiscal, the share of EVs in domestic vehicle sales would be ~2.5% for passenger vehicles (compared with 2.3% last fiscal), ~6% in two wheelers (5.1% last fiscal), ~18.5% in three wheelers (16% last fiscal), ~6.6% in buses (4.2% last fiscal) and ~2.5% (0.8% last fiscal) in small commercial vehicles.
Crisil Intelligence estimates that having 5-10% of EVs across segments plying on the roads can reduce CO2 emissions by 38 million tonne by 2030.
We have considered the average tailpipe emission from various fuels, average running, and vehicle parc — for all the automobiles in use at any given time — across segments barring IMHCV (Intermediate Medium & Heavy Cargo Vehicles) segment.
Rapid urbanisation and economic growth have led to an increase in vehicle ownership that, in turn, has escalated emissions. This alarming trend underscores the decarbonisation imperative.
To be sure, India has leapfrogged from Bharat Stage IV, or BS IV, emission norms to BS-VI.
Yet, locations such as the National Capital Region (NCR), the Mumbai Metropolitan Region (MMR) and Bengaluru, to name a few, have seen alarming rise in vehicular emission levels.
The major challenge in decarbonising the automotive sector is the reliance on ICE vehicles. For example, the population of BS VI parc vehicles today is relatively low at 25-30% compared with a combined 70-75% plying with BS I to BS IV technology.
Phasing out ICE vehicles and transitioning to EVs is essential but requires substantial investments in the EV ecosystem, including charging stations, and battery manufacturing.
And the need for collaboration between the government and the automotive industry to achieve substantial emission reductions cannot be overstated.
Government initiatives The government has implemented several initiatives such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME I and II), the Electric Mobility Promotion Scheme and the PM-e drive, which focus on demand incentives from a customer perspective and incentives for charge point operators.
This is in addition to some progressive states aligning their own policies with the central policies to offer additional incentives.
Under the Production Linked Incentive (PLI) scheme, significant funds have been allocated for the development of advanced chemistry cell and automotive sector totaling to almost ~Rs 45,000 crore.
These initiatives aim to create a supportive ecosystem for EVs and localise components here in India, which complements the Phased Manufacturing Programme (PMP) launched by the government earlier.
Industry efforts The automotive industry in India is also taking steps towards decarbonisation. Companies are investing significantly in research and development to produce zero emission vehicles.
Significant amounts are being pumped by automobile original equipment manufacturers into product development jointly with automotive component makers.
These initiatives are bearing fruit as we are seeing a lot of launches in the passenger vehicles, two-wheelers and buses segment across prince points.
Most of the parts have also got localised except cell, which will happen once PLI investments in advanced chemistry cell batteries start kicking in.
The roadmap A detailed and practical roadmap to decarbonise India's automotive sector aligning with the commitments made in Paris Climate Agreement is critical, and progress on implementation needs to be reviewed regularly to ensure alignment to the goals set through course-corrections.
Conclusion In India by the end of FY30 the EV penetration in domestic sales would be 15-20% in passenger vehicles, 35-40% in two wheelers, ~35-40% in three wheelers, ~20-25% in buses and ~10-15% in small commercial vehicles. As per CRISIL Intelligence estimates this will help us in reducing CO2 emissions to the tune of ~38 million tonnes, thanks to the increasing penetration of Electric Vehicles.
Decarbonising the automotive sector in India is a mammoth challenge and requires concentrated efforts from stakeholders including the government, the automotive industry and other stakeholders, especially customers.
While reasonable progress has been made through various initiatives so far, the target is far away.
A lot more needs to be done to ensure that we reach there.
Achieving these ambitious goals will demand constant evolution of the industry and requisite commitment in the form of innovation, investment and policy making.
Doing so will help India accelerate its commute to a decarbonised future.
