Roadblocks on EV highway: Overview of challenges in India’s EV adoption

EV adoption in India: The Indian electric vehicle market is poised for rapid expansion. An independent study by the CEEW Centre for Energy Finance (CEF) has highlighted that the EV market in India is likely to grow up to $206 billion by 2030. 

Despite the rising EV popularity, there are a set of challenges that need to be addressed and overcome to meet the government’s ambitious target to electrify India’s transportation by 2030. According to experts, this would require a cumulative investment of over $180 billion in vehicle production and charging infrastructure along with other favourable actions. 

Roadblocks on the way of the EV revolution

As of March 21, 2023, India has a total of 6,586 functional public EV charging stations, comprising 4,193 on national highways and 2,393 in urban locations. 

In this metric, Maharashtra leads with 1,354 stations, followed by Delhi with 1,065, and Gujarat with 750 charging points. Even though these numbers depict a significant jump in India’s EV infrastructure, our transportation requirements are still incomparable with the present resources available. We still need better infrastructure around EVs to promote their adoption amongst the masses as high maintenance and a lack of sufficient charging stations can discourage potential buyers. Insufficient charging stations could also limit driving range.

High price factor

An electric car in India costs around three times more than a petrol or diesel car. The battery, which accounts for 40-50 per cent of the cost of an EV, is the most expensive component and has a very high demand across the globe. According to a report by the Society of Indian Automobile Manufacturers (SIAM), the average price of an electric car in India in 2022 was Rs 16 lakh, an exactly double the average price of a petrol or diesel car, which is around Rs 8 lakh. 

Low range of choice

Indian automobile players are working to generate more EV options for Indian buyers. Indians currently have a handful of EVs to choose from and the slow adoption of traditional automakers can lead to limited EV options available for the buyers, eventually affecting the-term EV adoption.

Indian users also need more assurance from the government regarding power supply regularity. EVs are likely to push power consumption to significant upper limits leading to a requirement for enhanced power grids and supply networks. 

Undertaking transition

Minister for Road Transport & Highways Nitin Gadkari in a Lok Sabha statement in 2022 has declared that India had over 21 crore registered two-wheelers and over 7 crore four-wheelers out of which only 5,44,073 two-wheelers and 54,252 four-wheelers can be classified as EVs. 

In recent months, despite a significant increase in EVs on Indian roads, the gap between EVs and conventional vehicles remains significantly wide. 

To assist the EV transition in India, many new startups are emerging. HOP Infinity Energy Network is one such startup that aims to solve the problem of charging infrastructure. Talking to Republic, Ketan Mehta, Founder & CEO, HOP Electric Mobility said, “One of the main challenges for the adoption of EVs in India is the lack of adequate charging infrastructure. In order to accelerate our objective of driving electric mobility adoption in India, we are deploying a first-of-its-kind scheme - HOP Infinity Energy Network, in the EV category wherein customers can swap their batteries in minutes and enjoy uninterrupted rides.” 

EV can generate jobs

According to an IVCA-EY-Induslaw report, the Indian electric vehicle (EV) industry is poised to generate 10 million direct jobs and 50 million indirect jobs by 2030. Additionally, Niti Aayog also forecasts a substantial EV financing market in India which is projected to reach $50 billion by the same year. Over 50 original equipment manufacturers (OEMs), both start-ups and established manufacturers, have registered and revalidated their 106 EV models.

Government’s EV commitment

The Indian government has repeated its commitment to the upcoming EV transition. As explained by Nitin Gadkari in the parliament, “Prices of lithium-ion batteries are coming down. We are developing this chemistry of zinc-ion, aluminium-ion, and sodium-ion batteries. If you are spending Rs 100 on petrol, you will spend Rs 10 for using electric vehicles.” 

India’s Lithium bank

India’s Lithium resources can also be one of the biggest enablers of this process. According to Geological Survey of India (GSI) officials, large Lithium reserves have been found in J&K and Rajasthan’s Nagaur, which can fulfil 80 per cent of India’s total Lithium demands and reduce our dependency on imports. 

Incentives for EV manufacturing

The government has also introduced many incentives for EV buyers including direct discounts, coupons, interest subventions, road tax and registration fee exemptions, income tax benefits, and scrapping incentives. 

Talking to Republic about the changing EV landscape of India, Sameer Aggarwal, Founder and CEO at Revfin Sevices, an EV financing platform, said, “India's electric vehicle landscape is evolving rapidly, with an expanding charging infrastructure that's making EV adoption more practical than ever.”

“Today, consumers have access to a growing network of charging stations, providing convenience and peace of mind. Insurance options are aligning with EV needs, and government incentives are boosting affordability. While challenges remain, the practicality of EVs in India is on the rise,” Aggarwal added.