In an exclusive interview with Industry Outlook, Hirdesh Thakur, Executive Director, EKA, discusses India's rapidly growing commercial electric mobility sector, highlighting trends like rising adoption rates, government support, and technological advancements that are driving substantial market growth and sustainability efforts. With over 25+ years of experience across Electric Vehicles, Automotive, and Defense sectors. He has held senior roles at Pinnacle Industries and MAN Trucks India. A business development expert, Hirdesh excels in project and operations management, strategic planning, team leadership, and cross-cultural communication.
What is the current state of commercial electric mobility in India, and how are trends like increasing adoption rates, government support, and technological advancements shaping its growth?
According to Fortune Business Insights, the Indian EV market, which was valued at $3.21 billion in 2022, is expected to skyrocket to $113.99 billion by 2029, reflecting an impressive CAGR of 66.52%. This surge is driven by a combination of rising investments and strong government backing.
Additionally, as per a NITI Aayog and Rocky Mountain Institute (RMI) report, the EV finance sector is poised for significant growth, with projections suggesting it could reach Rs. 3.7 lakh crore (around $50 billion) by 2030. This combination of supportive policies, increasing investment, and technological advancements is creating a dynamic and rapidly evolving market for electric vehicles in India.
How do government policies and incentives, such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, impact the adoption of electric vehicles across different sectors in India?
Government policies and incentives are really shaping the future of electric vehicles (EVs) in India. Take the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, for example. This program is crucial because it offers subsidies that lower the upfront cost of EVs for both businesses and consumers, making them more accessible.
On top of that, the "Make in India" initiative and the Production Linked Incentive (PLI) scheme are working hand-in-hand with FAME. These policies are all about boosting local manufacturing of EV components, batteries, and vehicles. By doing this, the government aims to cut down India’s dependency on imports, lower production costs, and make Indian-made EVs more competitive on the global stage.
The Ministry of Road Transport and Highways (MoRTH) also announced that battery-operated Vehicles will be given green license plates and be exempted from permit requirements for carrying passengers or goods. Plus, they've advised states to waive road taxes on EVs, which further helps reduce the initial cost. All these measures are creating a supportive ecosystem for electric mobility, making it easier and more appealing for people and businesses to switch to EVs.
Can you elaborate on the challenges businesses encounter, like limited charging infrastructure and high initial costs, when transitioning to electric vehicles in the Indian market?
The shift to electric vehicles (EVs) in India is an exciting development, but it’s not without its hurdles. Right now, the upfront cost of EVs is still higher than traditional internal combustion engine vehicles, mainly because of the expensive advanced battery technology. Even though government subsidies help, businesses, especially smaller ones, might still face significant financial challenges.
One major issue is the cost of EVs, which should come down as production scales up, but for now, it can be a tough pill to swallow for many businesses, particularly small and medium enterprises.
Plus, there's the challenge of charging infrastructure. Many rural and semi-urban areas still lack sufficient charging stations, making it tricky for businesses to operate EVs efficiently, particularly for long-distance logistics and fleet operations.
Although EV technology is advancing, range anxiety remains a concern. Businesses need reliable and strategically placed charging stations to ensure smooth operations and alleviate worries about running out of power. Although fast-charging solutions are on the horizon, they aren’t yet universally available, and slow charging can be a real drawback for commercial fleets that need quick turnaround times.
Ongoing maintenance and management of charging infrastructure add another layer of complexity and cost for businesses transitioning to EVs. Plus, the limited availability of service centers for EVs can be a concern. Businesses need reliable maintenance options to keep their electric fleets running smoothly.
What strategies is India employing to integrate electric buses into public transportation networks, and how are businesses addressing the hurdles to achieve widespread adoption?
In addition to these state-level incentives, the central government’s Production Linked Incentive (PLI) scheme is also playing a key role. Launched in 2021 with a substantial budget of Rs 25,938 crore over five years, this scheme offers financial incentives of up to 18% for domestic manufacturers of electric vehicles and their components. It also made EVs more affordable by reducing GST from 12% to 5% and doing the same for charging stations.
However, transitioning to electric buses comes with its own set of challenges. For instance, operating and maintaining these buses requires specialized skills. So, training programs are crucial to ensure drivers and maintenance staff are well-versed in EV technology and safety protocols.
What are the primary factors driving the demand for electric commercial vehicles in India, especially in the urban transport and logistics sectors?
For urban transport, electric buses are gaining traction because they offer lower operating costs compared to diesel or CNG buses, even though the initial investment is higher. This cost-effectiveness becomes even more evident over the vehicle’s lifetime as energy-efficient technologies continue to advance.
Stricter emission norms are also pushing businesses to adopt cleaner technologies to avoid penalties. Electric vehicles help companies comply with these regulations, making them a more attractive option.
In the logistics sector, where fuel expenses are a significant burden, electric vehicles offer substantial savings over their lifetime. The rise of e-commerce has also heightened the demand for efficient last-mile delivery solutions, making electric vans and three-wheelers ideal due to their lower operating costs and positive impact on reducing urban congestion.
Another advantage of EVs is that they generally have fewer moving parts compared to internal combustion engine vehicles, leading to lower maintenance and repair costs—something fleet operators definitely appreciate. Electric buses, in particular, offer smoother acceleration, better torque, and improved ride quality, which translates to enhanced passenger comfort and better handling on city streets.
Financial incentives, like subsidies and tax rebates from schemes such as FAME, are also making electric commercial vehicles more accessible by lowering the initial purchase price. Over time, these incentives contribute to a lower total cost of ownership, making EVs an increasingly appealing choice for both urban transport and logistics.
How is the charging infrastructure evolving to support the growing number of electric commercial vehicles in Indian cities? What are the current constraints and future expansion plans?
One of the major challenges for electric buses is the establishment of adequate and reliable charging infrastructure. Operators need to ensure that charging stations are strategically located, capable of fast charging to minimize downtime, and compatible with various bus models in their fleet.
Right now, there's a push to install more high-speed charging stations and to create dedicated hubs in urban areas. Some cities are experimenting with innovative solutions like on-route charging systems and battery-swapping stations to keep buses running efficiently. However, there are still constraints such as the high cost of setting up charging infrastructure and the need for coordination with local utilities and infrastructure providers.
The government and private players are working together to improve the infrastructure, with plans to introduce more fast-charging stations and to integrate smart grid technology to handle the increased load. The goal is to create a seamless network that supports not just electric buses but also other commercial EVs, making the transition to electric transport smoother and more practical for fleet operators.
Multiple Charge Point Operators (CPOs) are entering the EV charging market, offering a variety of services primarily for three-wheelers and cars. However, commercial vehicles require careful planning of backend infrastructure. Investing in commercial EV charging can yield a better return on investment, as these vehicles are utilized for longer periods, leading to increased revenue. In contrast, personal vehicles have more limited usage, making commercial options more financially advantageous.
Looking ahead, what technological advancements and policy changes do you anticipate will shape the future of India's commercial electric mobility sector?
One of the driving forces behind the growing EV market is advancements in battery technology. Furthermore, the emergence of true EV platforms and aggregates—such as brake-by-wire, steer-by-wire, and e-axles with in-wheel motors—will streamline vehicle design and enhance performance.
For this vision to become a reality, the development of a comprehensive and reliable charging infrastructure will be crucial for widespread adoption. Integration with renewable energy sources will further enhance the sustainability of electric vehicles.
The integration of power electronics with high-voltage components, including systems that combine multiple functions (e.g., 3-in-1 or even 8-in-1 solutions), will optimize efficiency and reduce weight. Advances in motor technology, such as high-power density axial flux motors, will also contribute to better performance and efficiency.
The use of composite materials will further improve vehicle lightweighting and durability, enhancing overall performance while lowering energy consumption. Additionally, the end-of-life (EoL) management of vehicles will become increasingly important, promoting recycling and sustainable practices in the industry.
Supportive government policies will be critical in this landscape, particularly those that encourage domestic battery manufacturing and promote innovation in advanced technology products (ATP). The Government of India's inclusion of only ATPs in the Production-Linked Incentive (PLI) scheme will catalyze growth in this sector.
