India's EV Milestone in 2023 Sparks Calls for Hybrid Incentives and Upskilling Initiatives

17 Jan 2024 , 03:04 PM

India’s EV segment achieved a historic milestone with over 1.5 million unit sales in CY 2023, showing almost 50% YoY growth.

Despite government incentives like Auto PLI, battery PLI, and FAME II, EV penetration remains at around 1% of total sales in India.

Challenges include range anxiety, high EV prices, and insufficient charging infrastructure, hindering widespread adoption.

Battery Management System (BMS) and battery components account for almost half the cost of EVs, leading to high Total Cost of Ownership (TCO).

To break this Catch 22 situation, promoting ‘ICE+EV hybrid’ vehicles in smaller segments could help achieve economies of scale for battery manufacturing.

Incentivizing smaller hybrid vehicles, especially those under 4 meters and with an engine capacity under 1000 cc, can create a critical mass for battery manufacturing.

Proposed incentives include reduced GST rates, state policies providing additional incentives, covering hybrids under the PLI scheme, and income tax incentives for buyers.

This strategy aims to create domestic capacities, develop new technologies, and reduce TCO for EVs while giving breathing time for charging infrastructure to mature.

In the EV ecosystem, there’s a need to address human aspects, such as creating new job roles across the value chain from battery manufacturing to maintenance and charging infrastructure.

Special incentives for upskilling could be given to OEMs and other players, including higher deductions under income tax for reskilling expenditures.

The shift to EVs with fewer moving parts may disrupt employment in the service and maintenance industry, necessitating upskilling and reskilling initiatives for seamless growth.

For feedback and suggestions, write to us at [e-mail]