India is on the cusp of a major transformation in the automotive sector, with electric vehicles (EVs) poised to become a major driver of economic growth. While innovative solutions are needed to drive growth, environmental concerns also need to be addressed to ensure that the growth is sustainable in the long term. To facilitate this the Indian government has set ambitious targets for EV adoption, with the goal of having 30% of all new vehicles sold in India be electric by 2030.

ECONOMIC POTENTIAL OF EV IN INDIA

According to Economic Survey 2022-23, the automobile sector is a key driver of India’s economic growth. The electric car market in India is predicted to increase by an average of 49 percent each year from 2022 to 2030. By 2030, it's estimated that around 10 million electric cars will be sold every year. This growth in the electric car industry is expected to lead to the creation of 50 million jobs, both directly in the industry and indirectly through related businesses, by the year 2030.

EV INDUSTRY – JOB CREATION

One of the most significant contributions of the EV industry to India's economy is job creation. The shift towards electric vehicles opens numerous employment opportunities across the value chain, including manufacturing, research and development, sales, and maintenance.

1) Manufacturing: The production of EV components such as batteries, electric motors, and charging infrastructure requires a skilled workforce. India's automotive industry can leverage its manufacturing prowess to establish a robust EV ecosystem, creating millions of jobs.

2) Research and Development (R&D): To stay competitive in the global EV market, India needs to invest in R&D for EV technology. This will lead to highly skilled employment in areas like battery technology, software development, and vehicle design.

3) Charging Infrastructure: Setting up a widespread network of charging stations will require labor for installation, maintenance, and management, creating employment opportunities in the service sector.

4) Skilling and Training: As the EV industry grows, there will be a need for training and upskilling programs to equip the workforce with the necessary skills, fostering employment growth in the education and training sector.

The survey conducted by CIEL HR services has uncovered some fascinating insights. One striking finding is that, between 2020 and 2022, there has been an astounding 108% increase in the number of employees in various companies. In addition, in certain electric vehicle (EV) companies, women have made their mark across all areas within the industry. Notably, women have also risen to prominent leadership positions in these companies, including top management roles.

Also, a study by the Indian Institute of Management Bangalore estimates that the EV industry could create up to 50 million jobs by 2030. This would be a significant boost to the Indian economy.

INVESTMENTS IN EV INDUSTRY

According to a recent report from CBRE South Asia Pvt Ltd, a real estate consulting firm, investments in electric vehicles (EVs) across India from 2020 to the first half of 2023 totaled $28.8 billion. The states of Maharashtra and Tamil Nadu were leaders in these investments, each contributing 15% or around $4.3 billion.

These investments are expected to have a positive impact on the real estate sector. They will lead to the creation of new manufacturing facilities, industrial areas, and clusters, with a particular focus on supporting last-mile deliveries for e-commerce companies and logistics firms. The government is also encouraging the adoption of EVs in public transportation and offering tax benefits and incentives to first-time EV buyers through schemes like FAME.

100% FDI is allowed under this sector under the automatic route by the Government of India.

EV TO NATIONS GROWTH

India, a significant importer of oil, annually spending approximately $100 billion on oil imports, finds itself at a pivotal juncture. The adoption of electric vehicles (EVs) creates a transformative opportunity that could result in savings of a substantial $60 billion per year while simultaneously encouraging an environment conducive to remarkable economic expansion marking a significant stride toward greater self-sufficiency and energy security.

The transition to EVs unquestionably demands significant investments in essential infrastructure, including charging stations. However, the Indian government has already taken commendable strides in bolstering EV adoption through initiatives like the FAME India scheme.

Beyond the substantial cost savings and improved energy security, the growth of the EV industry is poised to unlock a plethora of job opportunities.

Moreover, the EV industry's potential to contribute approximately 12% to India's GDP by 2030 and attract an impressive $20 billion in foreign direct investment underscores its status as a critical economic driver. Notably, this burgeoning sector not only promises job creation but also technological innovation, particularly in areas such as battery storage and smart grid management.

EV ADDRESSING ENVIRONMENTAL CONCERN

Electric Vehicles (EVs) address environmental concerns in a number of ways.

Mainly they produce zero tailpipe emissions, which helps to reduce air pollution. According to the EPA, electric cars produce an average of 60% fewer emissions because they do not burn fossil fuels, which release harmful pollutants into the air, such as carbon monoxide, nitrogen oxides, and particulate matter.

EVs also help to reduce greenhouse gas emissions. Greenhouse gases trap heat in the atmosphere, which contributes to climate change. According to the Intergovernmental Panel on Climate Change (IPCC), transportation is responsible for about 29% of global greenhouse gas emissions. EVs can help to reduce these emissions, which will lead to improved air quality. According to the EPA, EVs can help to reduce smog-forming emissions by up to 80%.

Moreover, EVs can help to conserve resources as they do not require oil. In addition, they also help to reduce the demand for electricity, which helps in reducing the strain on the power grid.

As the EV market continues to grow, it is expected to have a significant positive impact on the environment.

In conclusion, India's transition to electric vehicles represents a historic opportunity to simultaneously reduce oil dependency, stimulate job growth, position the nation as a global leader in the EV industry and significantly reduce carbon emission. With proactive government initiatives and a promising trajectory, India's EV sector is poised to accelerate its growth, underpinning the nation's economic prosperity for years to come.

(The above-given article has been attributed to Dinesh Arjun who is the Co-founder and CEO, Raptee)