Why in news?
NITI Aayog released a report in August 2025 outlining how India could unlock a US$200 billion electric‑vehicle market by 2035. The report charts reforms needed to accelerate electric‑vehicle (EV) adoption, create jobs and cut emissions.
Growth of the EV market
- EV sales have risen from around 0.5 % of all vehicles in 2018 to about 7.7 % in 2024, with over 6.5 million EVs now on Indian roads.
- India registered around 1.2 million EVs in 2024 alone. By 2035 it will need about 2.9 million public charging points to support widespread adoption.
- Twenty‑nine states and union territories have announced or drafted EV policies, though progress varies widely.
- Battery demand is expected to exceed 250 GWh by 2035, creating an opportunity for domestic manufacturing.
- The report estimates that a successful EV transition could create over 10 million jobs and save about ₹3.7 trillion in oil imports while avoiding almost one gigatonne of carbon dioxide emissions.
Opportunities from EV adoption
- Energy security: Switching from imported oil to electricity improves India’s energy self‑reliance.
- Green manufacturing: Local production of batteries, electric motors and electronics can position India as a global EV hub.
- Urban mobility reform: Electric buses and two‑wheelers can reduce pollution and promote shared mobility in cities.
- Innovation ecosystem: The EV sector encourages research into battery chemistries, charging technologies and vehicle design.
- Sustainable infrastructure: EV uptake drives the development of smart grids and energy‑efficient urban planning.
Five policy “unlocks”
- Stable policy architecture: Clear, long‑term policies at both central and state level give investors confidence.
- Low‑cost financing: Affordable green loans and credit insurance can help buyers, especially in informal sectors.
- EV ecosystem development: Build full value chains for batteries and motors, including recycling and reuse.
- Public charging expansion: Dramatically increase the number of charging stations to support mass adoption.
- Incentivising adoption: Subsidies, tax rebates and carbon credits can offset the high upfront cost of EVs.
Challenges to overcome
- High upfront costs: Batteries make EVs more expensive than petrol or diesel vehicles.
- Limited financing: Low credit penetration and risk‑averse lenders restrict EV loans.
- Patchy charging infrastructure: Many charging stations are concentrated in a few cities, leaving rural and smaller towns underserved.
- Low R&D in recycling: Battery recycling technologies and local manufacturing of critical components remain underdeveloped.
- Policy fragmentation: Different state‑level policies create confusion; there is no national coordination mechanism.
Way forward: The report calls for a national Green Mobility Mission, unified EV policies, localisation of battery manufacture and the creation of an EV readiness index for states. Reskilling workers from the internal combustion engine sector will ensure a just transition. With decisive action on financing, localisation and infrastructure, India could unlock the full economic and environmental benefits of electric mobility.