Electric vehicle industry: Was 2022 a flash in the pan or a significant step towards e-mobility?

India, just like several other countries, highly depends on oil imports to power its mobility needs, both personal and commercial. However, it might not stay the same in the next 20 years. The growing climate crisis, pollution, congestion, high prices of oil, and international commitments have suddenly made the internal combustion engines less attractive. More than these factors, the need for India to become self-reliant has invigorated progressive actions towards EV adoption.

Electric vehicles have been around for some time, but over the last decade, there has been a significant improvement in sales. The government has made substantial developments in designing policies and schemes to fuel the alternative mobility plan. 2022 has seen a stellar year for EV sales, but is the growth sustainable? Will EVs sales continue to stay strong or was 2022 a flash in the pan?

EVs found its way

The electric vehicle industry received its much-required validation from the Indian population. The sector saw over 686% growth in EV adoption with over 2.1 lakh cars, two-wheeler, three-wheeler and commercial EV units being sold in the April-June 2022 period, as per FADA (Federation of Automobile Dealers Associations) sourced industry statistics.

Electric vehicles are making their presence felt in the Indian market, not only because of the various benefits the technology offers but also because of the instrumental role the government has played in backing up production and expansion. The launch of the e-AMRIT portal addressed the various concerns about the adoption of EVs as well as investment opportunities and information about government schemes and policies for manufacturers. Furthermore, the government also introduced the second phase of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME 2) scheme to give the necessary push to EV manufacturers and cut down oil imports.

We are still at the nascent stage in the adoption of EVs, and a large part of the problem is the concerns around vehicle range and pricing. Giants like Tata and Mahindra have already invested in revolutionizing the technology while also collaborating with the government in building the EV infrastructure. Looking at the growth potential, private players have been entering the market to explore opportunities.

2023: What to expect?

As per FADA statistics, the fast-increasing EV sales suggest that there is more to come in the coming years. Retail sales of EVs were up by 218%, with over 4.29 lakh EV units sold (so far) in the financial year 2022, setting a new target for 2023. Even though the numbers are promising, there is a lot to be done yet.
The growth witnessed by the EV industry is despite numerous challenges that continue to exist. The EV manufacturing ecosystem is nowhere near self-sustenance, and to ensure growth, the government must take positive actions towards not only introducing schemes but also building stronger partnerships with key players, both domestically and internationally.

India is aiming at 100% of new vehicles to be zero-emission by 2030. While we may have set an aggressive target, we will see a considerable chunk of vehicle sales continue to be powered by petrol/diesel in the coming future. Between now and what’s coming, the electric vehicle industry will require a combination of private, public and government firms to invest in areas ranging from charging infrastructure and energy storage to educating people. All things considered, 2022 has been a momentous year for the electric vehicle industry, with improvement in sales, major policy developments and indigenous companies taking charge of leading the technology and market front.

The writer is Director, Aarya Automobiles.

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