India sets a goal of 15% electric vehicles by 2023 to cut fossil fuel use

Sales of EVs in India estimated at 2,000 last year: BNEF

India aims to have at least 15 per cent of the vehicles on its roads to be electric in five years, an official said, signalling the government's wish to join a long list of countries around the world that are already seeking to cut fossil fuels aggressively.

“If at least 15 per cent comes in the next five years, it will be useful for the country,” Transport Minister Nitin Gadkari said Thursday at a conference organized by the Society of Indian Automobile Manufacturers in New Delhi. “This is a time for the country to think seriously about pollution.”

India has been a laggard in the global race toward electrification of automobiles, with no clear guiding policy unlike China, which has offered hefty subsidies and incentives to promote battery-powered cars in its efforts to reduce dependence on oil imports. Prime Minister Narendra Modi’s administration had earlier expressed ambitions of achieving a target of 30 per cent EVs by 2030.

While cumulative global sales of passenger electric vehicles likely surpassed 4 million last week, with China accounting for more than a third since 2011, India sold an estimated 2,000 EVs last year. EVs may account for about 7 per cent of sales in India by 2030, according to Bloomberg NEF.

In contrast, China is targeting sales of 7 million new-energy vehicles by 2025, which may account for 15 per cent of the vehicle market by then, according to China Association of Automobile Manufacturers. The Asian giant has offered as much as $7,000 in incentives for an EV with a range of 400 kilometers and above, making the automobile more affordable to customers.

A slew of carmakers including the local units of Hyundai Motor Co. and Suzuki Motor Corp. have announced plans to introduce electric vehicles to the South Asian country as early as next year. Suzuki, which is the market leader, has said it needs to make 1.5 million EVs in the country by 2030 to retain its share of 50 per cent. Ford Motor Co. has signed a pact with local partner Mahindra & Mahindra Ltd. to jointly develop EVs.