Introduction

The role of the Electric Vehicle (EV) sector in India is extremely important in realising the vision of Aatmanirbhar Bharat. According to Fortune Business Insights, the Indian electric vehicle is expected to grow from USD 3.21 billion in 2022 to USD 113.99 billion by 2029 at a CAGR of 66.52 percent. The government of India has undertaken many initiatives to expand the EV sector in the country and promote research, development, and commercialisation of EV sub-systems. This article highlights initiatives to enhance indigenous capabilities in EV technologies, focusing on Research & Development (R&D), manufacturing incentives, and public-private partnerships.

Current Trends

To promote the development of Indigenous technologies in the EV sector and strengthen the domestic manufacturing base, the Ministry of Electronics and Information Technology (MeitY) has initiated an R&D programme to encourage the development of Electric Vehicles Sub-Systems (EVSS) in the areas of:

• Electric Motor

• EV Chargers (AC/DC) 

• DC-DC Converters

• Controller

• Battery Management Systems (BMS)

The programme provides financial support to academia, R&D organisations, industries, startups, and MSMEs in conducting R&D activities to advance EV sub-systems.  

Other Key Policy Measures

 

In October 2024, the MeitY and the Ministry of Heavy Industries (MHI) invited proposals through a Joint Call for Proposal for the R&D of EV sub-systems. Salient features of the proposal are:

• Grant-in-aid for R&D

• MHI supports the testing and certifications of the developed technologies

• Product development agency (PDA) to support the development of the product

• A minimum upfront contribution of 20 percent of the project outlay will be borne by the participating industry partner

A Centre of Excellence (CoE) has been set up at the Centre for Materials for Electronics Technology (C-MET), Pune, for the design and development of Lithium-ion battery (LIB), Sodium-ion battery (SIB), and Li-polymer battery cell technologies. Centre for Materials for Electronics Technology (C-MET) is an autonomous scientific society under MeitY. It has three R&D laboratories located at Pune, Hyderabad & Thrissur, focusing on different thrust areas on critical electronic materials.

The Department of Science and Technology (DST) supports R&D in the EV domain by launching the Mission for Advancement in High Impact Areas in EV components. The NIDHI Seed Support Program of DST provides financial support to startups through the (NIDHI-SSP), helping them scale their innovations into successful ventures. The MHI supports R&D in EV in academic institutions under the Capital Goods Scheme. 

The private sector in India, not just the government, is also contributing greatly towards supporting R&D and innovation in the EV sector. The private sector is providing supporting infrastructures to expand the EV ecosystem. For example, Hyderabad-based software company “telioEV” helps EV owners locate the nearest charging station through the app. It also provides a charging management system on the cloud. Ola Electric, the electric vehicle startup, plans to power its electric vehicles with its lithium-ion battery cells by early 2025. In 2023, Ola signed a MoU with the Tamil Nadu Government, committing investments of Rs 7,614 crore for manufacturing electric cars, two-wheelers, and the lithium cell gigafactory in the state. Ather Energy, a Bangalore-based startup, has launched the Ather 450X, an electric scooter with impressive performance and a range of up to 85 km on just one charge. 

Promoting the Growth of EVs in India

The Government of India has been providing various subsidies and financial incentives to support the growth of the EV sector in India. To widen EVs’ adaptability, the Government provides tax benefits to EV buyers. In March 2023, the Government introduced a new section, “80EEB” to the Income Tax Act, 1961, that allows taxpayers to claim deductions on electric vehicles. Under this section, taxpayers can claim a deduction of up to Rs. 1.5 lakh on the interest paid on loans taken to purchase EVs. 

In addition, the Government has the following initiatives to provide financial assistance/subsidies on EV/EV Sub-Systems:

• Production Linked Incentive (PLI) Scheme for Automobile and Auto Component Industry in India (PLI-Auto)

• Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME India) Scheme Phase-II

• PLI Scheme for Advanced Chemistry Cell (ACC)

• PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme

• PM e-Bus Sewa-Payment Security Mechanism (PSM) Scheme

• Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI)

Various schemes for incentives and subsidies to promote the commercialisation and manufacturing of EVs are contributing to increasing the EV sector's local supply chain. 

Conclusion

The Government has adopted a holistic approach to developing a robust EV ecosystem in India, with the private sector also playing a crucial role. By fostering indigenous innovation, promoting R&D and innovation, providing financial support, announcing subsidies and tax benefits, and encouraging multi-stakeholder collaboration, the Government aims to position India as a global leader in EV technologies. The steps taken towards supporting the growth of EVs in India will reduce the carbon footprint and generate employment, ensure sustainable development, improve air quality, enhance energy security, and contribute significantly to the nation's economic growth and development.