30% electric vehicles penetration into automobile market can help India save INR 1 lakh crore on crude oil imports

Recently, a study by the Council on Energy, Environment and Water (CEEW) reveals that India can save up to INR 1 lakh crore ($14 billion) annually on crude oil imports if it indulges in electric vehicles and allow to garner 30 per cent share of the country’s new vehicle sales by 2030.

The increase in electric vehicles penetration can also boost the combined market size of powertrain, battery and public chargers to more than INR 2 lakh crore ($28 billion) in India, while creating 1,20,000 new jobs.

The CEEW study, supported by the Shakti Sustainable Energy Foundation, also shows that 30 per cent penetration of electric vehicles into the automobile market can also lead to several environmental benefits, such as a 17 per cent decrease each in nitrogen oxide and dioxide emissions, 18 per cent reduction in carbon monoxide emissions, and 4 per cent lesser greenhouse gas emissions relative to the business as usual scenario (BAU).

Abhinav Soman, one of the authors of the study and a researcher at CEEW, said, “As India recovers from the pandemic, a focus on developing India’s domestic EV manufacturing sector and increasing the penetration of electric vehicles in road transport would help deliver on jobs, growth and sustainability. This would require creating a robust and comprehensive transition plan for electric mobility that capitalises on the opportunities created in the form of improvement in balance of payments, new markets, and jobs generated. Further, we strongly recommend that the EV roadmap for India should target a significantly higher share of EV penetration as the 30% target could be achieved just via the sales of electric two-wheelers and electric three-wheelers.”

CEEW also shows that meeting 30 per cent EV penetration target by 2030 will, however, lead to trade-offs such as 19 per cent fewer jobs in the oil sector and in the internal combustion engine (ICE) vehicle manufacturing sector combined. Furthermore, annual value add loss in the oil and automobile sector may amount to about INR 2 lakh crore, and the central and state government may face a deprivation of INR 1 lakh crore in tax revenue annually from reduced sales of petrol and diesel.