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Will the Future of Indian Car Industry Move to Electric Vehicle Technology?

A concerted push by the Government and constant innovations from automobile manufacturers may quickly turn the idea of complete e-mobility in India into reality.

02 Feb 2021
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Keeping in mind environmental concerns and the population’s reliance on fossil fuels, the Indian Government plans to move towards complete e-mobility by 2030. In the Climate Risk Index 2020 released by GermanWatch, India ranked fifth in the global vulnerability ladder. This makes it all the more critical for India to adopt electric vehicle technology.

However, despite concerted efforts by the Government, sale of electric cars and two-wheelers in India hasn't reached its pinnacle yet. According to a study by Castrol, most new car buyers in India won't be purchasing electric vehicles until 2025. Many reasons can be attributed to this slow sale of electric cars in India, such as lack of infrastructure, high car pricing, and the time-taking battery charging process. We recommend you to buy a car insurance with your brand new electric car to ensure protection against any unforeseen circumstances.

What exactly is an electric car?

An electric vehicle or an e-car runs on an electric motor instead of conventional petrol, diesel or CNG engine. It gains its power by utilising the electricity stored in the motor's battery. Here, the electric motor does the job of a fuel engine. You can recharge the battery of an e-car again and again. Today, there are three kinds of electric cars available in India:

  • Solar-powered electric cars which can be recharged using solar energy
  • Hybrid electric cars, which can be powered by both internal combustion and battery
  • Electric cars which are entirely battery-operated

What are the advantages of using electric cars?

Apart from being environment-friendly, electric cars offer dramatically lower operating and maintenance costs as compared to conventional petrol and diesel cars. Let's look at some of the advantages of using an electric vehicle:

  • Puts the environment first

    Electric cars are environment-friendly. Since they derive their power from a battery instead of internal combustion engines, they do not produce any emissions. Thus, electric mobility can help a long way in reducing air pollution in urban Indian cities.

  • Lower operational costs

    On average, electric cars usage may help a person reduce up to 70 to 80 per cent of his/her fuel expenses. From the maintenance point of view, electric vehicles have 75 per cent fewer moving components than conventional cars, which translates into lower maintenance bills.

  • More savings

    The Government of India has taken several steps to increase e-mobility in the country. One of them is offering reductions in road tax charges and vehicle registration fees for electric vehicles. The Government also provides subsidies and incentives to the consumers purchasing electric cars.

  • Reduction in BoP deficit

    India needs to import oil from foreign countries to meet its citizens' demands. In the financial year 2019-20 alone, India imported crude oil worth 120 billion dollars, which increased its Balance of Payment (BoP) deficit with foreign countries. Switching to electric cars can help in reducing this deficit.

Are electric cars gaining popularity in India?

Though electric cars' sales were not too encouraging during the initial years, it's slowly gaining popularity among the Indian car buyers. Many top automobile manufacturers, including Hyundai, Tata Motors, Mahindra and Renault, have come up with some best electric cars for the Indian market. These cars are loaded with features and do not compromise on the power factor.

As per Google trends, electric cars' interest among the common Indian consumers has risen during the last few years. According to industry leaders, the future of the automotive industry in India looks to be electric. There also comes a need of having a motor insurance with your future electric vehicle, because these revolutionary innovations still don't guarantee to safeguard your vehicle under some unforeseen incidents.

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Keeping in mind environmental concerns and the population’s reliance on fossil fuels, the Indian Government plans to move towards complete e-mobility by 2030. In the

What lies ahead?

As mentioned above, the industry experts believe that electric vehicles are the future of Indian automotive industry. As per a Globe Newswire report, India's electric vehicle market is expected to grow with a Compound Annual Growth Rate (CAGR) of 22.1 per cent in the near future. The main reasons behind these expectations are concerted push by the Indian Government and constant innovations by automobile manufactures.

In 2013, the Government of India laid out an ambitious plan called "National Electric Mobility Mission Plan (NEMMP), which aimed to increase the penetration of electric vehicles in the country. On 1st April 2019, the Government rolled out phase 2 of its electric mobility transition plan called "Faster Adoption and Manufacturing of Electric Vehicles (FAME)".

The second phase aimed at boosting the e-mobility in India and increasing the number of electric cars and vehicles in commercial fleets. This included encouragement for electric buses, strong hybrid cars and auto-rickshaws, electric two-wheelers, and the focus on establishing robust battery charging infrastructure across the country.

Several local automobile giants such as Tata Motors and M&M have started focussing extensively on producing next-gen electric vehicles for Indian consumers. Recently, global giant Tesla has also joined hands with the Indian Government to launch its innovative and premium electric cars in the country.



Though the future of electric cars in India seems promising, certain challenges lie in front of the Government. Breaking away from the norm and establishing a new pattern is always challenging. Therefore, a lot of sensitisation and consumer education is required.

Apart from this, the Government needs to focus extensively on improving the battery charging infrastructure across the country, supporting the automobile manufacturers to enhance the battery performance of their electric cars, reducing the gap between demand and supply, and creating a closed-loop mobility ecosystem for a smooth shift from conventional vehicles to e-mobility.

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