Recent statements by the government talk of achieving 100% electric vehicle (EV) sales by 2030. While this calls for initiatives to ensure faster adoption of pure EVs in the run up to the 2030 target, there shall also be implications for stakeholders across the automotive value chain—suppliers, OEMs, service stations/mechanics, oil refineries and discoms. The effects would entail change in forex transactions amounts, tax collections, employment levels, waste generation/management, energy mix and, of course, pollution levels. In order to incentivise manufacturers, the government had launched FAME—Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India—in 2015 to boost hybrid and electric technology adoption. In addition, in the upcoming GST regulation, the government is providing tax incentives (excise duty of 12% for battery EVs versus 28% for all other types of vehicles with an additional cess ranging from 1% to 15%) that treat hybrids and EVs preferentially over conventional technologies. Traditional business models could change. India lacks the capabilities to develop lithium-ion batteries. While the Tesla story is well known, we could see Chinese OEMs entering India. Oil marketing companies (OMCs) would face direct impact due to lower fuel consumption by 2030. Incremental burden of 1.12 TWh (terawatt-hours) is expected on account of electric mobility. A major burden will be felt by discoms for realizing an effective distribution network for nationwide acceptance of electric mobility.

(Financial Express)