World Environment Day: Has move towards electric cars helped us reduce dependence on fossils?
3 min read 03 Jun 2023, 04:22 PM ISTIndia's domestic electric vehicle (EV) market is predicted to grow 49% between 2022 and 2030, reaching 10 million sales annually by 2030. However, the source of electricity that powers EVs must be decarbonised if they are to truly be zero-emission agents. Is that possible?
PremiumConsidering the fact that the transport sector contributes to nearly one-fifth of global greenhouse gas emissions, it is natural that responsible governments would go the extra mile to decarbonize the sector. Up to 3-4 times more energy efficient than ICE vehicles, electric vehicles (EV) are laudably gaining traction across the world and from all stakeholders.
Greening the transport sector has a crucial role to play in achieving the lofty target of halving annual greenhouse gas emissions by 2030. Keeping global warming below 1.5°C this century is not possible without reducing or nullifying emissions from the transport sector and reducing its reliance on fossil fuels.
As per the estimate of the International Energy Agency (IEA), the global EV population is expected to grow five-fold to 50 million by 2030 from 10 million in 2020. By 2050, the number of EVs on the roads is expected to touch the one billion mark.
In April 2023, the electric vehicle and SUV market had sales of 5,147 units, which was its second-best monthly total. With 1,946 units less sold than the best-ever monthly sales of 7,093 units in March 2023, this is an 185% YoY gain (April 2022: 1,803 units). The share of electric vehicles in the domestic vehicle population has increased from 0.6% in FY22 to 1.3% in FY23. Similarly, it increased from 30.7% to 34.50% in the three-wheeler segment and from 1.8% to 4.3% in the two-wheeler segment. According to the Economic Survey 2023, India's domestic electric vehicle market will grow at a CAGR of 49% between 2022 and 2030, reaching 10 million annual sales by 2030.
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The taxi industry in India is expanding rapidly, owing to the country's massive market size and changing travel preferences. By the end of 2023, revenue in the Indian ride-hailing & taxi industry is expected to reach US $13.41 billion. The Indian EV market is expected to reach 6.34 million units by 2027, with a compound annual growth rate (CAGR) of 44.5%. The government's drive for electric mobility, along with advantages like lower taxes and subsidies, boosts the EV taxi business even more. As travel habits evolve towards more sustainable modes of transportation, the EV cab market in India has significant potential for both operators and users.
However, this is only one side of the story. Until and unless the source of electricity that powers these EVs are decarbonized, can EVs qualify as zero-emission agents in the true sense of the term? It is equally imperative to follow sustainable processes in the production of critical minerals and batteries used in EVs.
Solutions are there. Discarding coal and other non-renewable sources, electricity used to charge electric vehicles can increasingly come from renewable energy sources like solar, wind, and hydropower. While this may cost a little higher initially, it could be nullified to a great extent in the long run with volumes. This transition is critical to maximizing the long-term environmental benefits of EVs as well.
The transition to electric vehicles is not a stand-alone answer to environmental problems. It must be accompanied by an all-encompassing initiative to decarbonize the electricity sector and encourage the adoption of renewable energy. To speed up the switch to clean energy, businesses, governments, and individuals must lend support and work in tandem. This will ensure the electricity used to power EVs comes from renewable sources rather than fossil fuels.
The author is Nimish Trivedi, CEO & Co-Founder Evera Cab. Evera Cab is an all-electric cab service provider in Delhi-NCR, offering a range of services such as airport, intercity, and local city transfers.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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