Autobayng News Team
The EV transition is not just about meeting climate change obligations or reducing India’s oil import bill but is also an emerging industrial opportunity.“>
India stands at a pivotal juncture. Our cities are grappling with worsening air quality, greenhouse gas emissions are climbing, and mobility needs are surging. Electric vehicles (EVs) offer a rare lever to address all three challenges while simultaneously creating a globally competitive industrial base. The question is no longer if India will electrify, but how fast and how strategically we can make it happen.
The biggest near-term climate gains lie in electrifying high-utilization segments such as two-wheelers, three-wheelers, and buses. These vehicles dominate urban travel and last-mile logistics, operating intensively in dense population centers. Their predictable duty cycles make them ideal for electrification, delivering outsized lifecycle CO₂ savings and cleaner air. Commercial fleets and public transit are early adopters offering the fastest path to significant emissions reductions when paired with a greener grid. Passenger cars will matter for long-term adoption, but the climate case is strongest when India prioritizes volume segments that already approach total cost of ownership parity.
The momentum is clearly visible. In 2025, India recorded its highest-ever EV registrations, led by two- and three-wheelers, a surge in e-buses under public programs, and premium four-wheelers gaining share. The year also saw a record number of new EV launches in the mass passenger vehicle segment. Yet subsidies alone cannot sustain this transition. The next phase demands durable market architecture: policy certainty, infrastructure scale-up, and localisation.
Charging infrastructure remains the most visible bottleneck. India’s public charger base is far below what a rapidly electrifying fleet requires. Dense, interoperable networks across homes, workplaces, and public spaces, combined with strategic DC fast-charging corridors, are essential. Battery swapping for three-wheelers and reliable fast chargers for buses and delivery fleets are necessary to address operational realities. Uniform standards, open protocols, and easy payment systems will make charging seamless and encourage adoption.
Non-fiscal incentives such as urban priority access, dedicated lanes, and differentiated tolls can further accelerate adoption without permanent subsidies. Aggregating demand through government and corporate fleet procurement will de-risk investments and create scale. Policies and time-bound signals, such as phased fleet electrification mandates post-2030, increasing domestic value-add requirements, and pilot programs for emerging technologies like vehicle-to-grid, will go a long way to attract private capital and justify large investments.
The EV transition is not just about meeting climate change obligations or reducing India’s oil import bill but is also an emerging industrial opportunity. India cannot continue merely as an assembler of imported cells but must focus on localizing value in batteries, power electronics, and software. Production-linked incentives and strategic joint ventures can support setup of large factories, but policy must favor cost-appropriate chemistries for mass markets while supporting advanced chemistries for premium segments.
Traditional ICE suppliers will need to pivot to motors, inverters, and thermal systems, backed by reskilling programs for their workforce. Circularity through battery recycling and certified health reporting will reduce raw material risk and support residual values. Software-defined vehicles will capture recurring revenue through over-the-air updates, battery management systems, and data services.
The transition is however not without its challenges. A slow rollout of chargers, fragmented standards, or a failure to localise cells would leave India dependent on imports and vulnerable to supply shocks. Poorly designed incentives could create stranded assets or fiscal burdens. And without a greening of the grid, electrification will merely shift emissions from vehicle tailpipes to power plants. But these risks are manageable if policymakers and industry act in unison by providing long term signals to promote investment, encourage renewable procurement, smart incentives and support reskilling of suppliers/ MSMEs to make the transition.
We can learn selectively from global examples. Norway shows how persistent demand-side incentives and convenience can drive near-complete electrification of new car sales. China demonstrates how proactive policy support, early industrial scale, and supply chain integration can create global champions. India’s comparative advantage lies in its massive two-wheeler and three-wheeler market, software talent, and manufacturing ecosystem. By prioritizing volume segments, building domestic manufacturing capacity, and creating export hubs, India can convert a decarbonization imperative into an industrial success story, and in the process become a global leader in clean mobility.
(Disclaimer: The article is authored by Jeffry Jacob, Partner and National Sector Leader – Automotive, KPMG in India. Views expressed are personal.)
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