Here’s why India is pumping US$3.5 bil into electric vehicle initiatives
- Incentives will be provided to automobile and drone manufacturers over a five-year period
- Minimum investments of US$ 34 million are needed to qualify
- However, details of the program are still unclear
India will splash 257 billion rupees (US$3.5 billion) on incentives for the auto sector to boost production of electric vehicles, the government said Wednesday, as it seeks to cut greenhouse gas emissions as part of the Paris climate accord.
The scheme will allow India to “leapfrog to environmentally cleaner, electric vehicles and hydrogen fuel cell vehicles”, the cabinet said in a statement.
“It will herald a new age in higher technology, more efficient and green automotive manufacturing,” it added.
The incentives will be provided to automobile and drone manufacturers in India over a five-year period.
To qualify for the scheme, the new or existing manufacturers have to invest at least US$34 million in India over the five years, according to local business publication Bloomberg Quint.
No further details about the program were released by the government Wednesday, but it said it was expected to generate some US$5.8 billion in fresh investments and create 750,000 jobs.
Electric vehicles driving new sectorial growth?
The announcement comes in the wake of reports that electric car pioneer Tesla was looking to enter the Indian market.
Auto sector analyst Awanish Chandra told AFP the scheme was a clear message from the government that it wants to “incentivize green energy”.
“It is an equal opportunity for everyone. The government will be very happy if Tesla comes and makes a huge investment. That will give good competition to our own players,” he said.
Earlier this year, Tech Wire Asia reported that the government of India had set a goal to produce 30% electric vehicles by 2030.
Response from the private sector has been good, with multiple players stepping up to not just produce EVs, but also invest in and manufacture lithium-ion batteries, such as Vikram Handa, the son-in-law of the country’s biggest steel tycoon.
Handa established Epsilon Advanced Materials Pvt, India’s first manufacturer of lithium-ion battery parts, in August 2020.
Additionally, several Indian automakers have started producing or have announced plans to make EVs, with the latest being Bhavish Aggarwal’s Ola Electric Mobility Pvt.
Aggarwal has said he expects the startup will be making 15% of the world’s e-scooters by the summer of 2022.
India’s trying to meet climate change goals, but…
India is the world’s third-biggest carbon emitter and is expected to become the world’s most populous country by the middle of the decade.
The push for clean vehicles is also fuelled by the need to reduce pollution, with major cities in the nation of 1.3 billion people home to some of the world’s dirtiest air.
The country is on track to exceed its voluntary goals under the 2015 Paris climate agreement.
However, carbon emissions are still on track to grow 50 percent by 2040, driven by industry and transport — some 25 million more trucks are expected on India’s roads by 2040, according to a forecast by the International Energy Agency.
With additional reporting by Agence France-Presse
- Is the Carsome unicorn status in Malaysia overhyped amidst recent layoffs?
- Managing cybersecurity risks caused by employees can be as harmful as hacking in APAC
- Fintechs leading the change for AI adoption in risk and compliance
- Gaming to learn – the latest in AI education
- Manufacturers solve the puzzle to achieve both growth and profitability: Better ERP support