Govt. incentives to drive EV penetration in India, charging infrastructure key: Moody's

Government incentives, including those to consumers, local battery manufacturing, state-level subsidies and cuts in GST rates would help drive electric vehicles’ penetration in India, Moody’s has said.

Government incentives, including those to consumers, local battery manufacturing, state-level subsidies and cuts in GST rates would help drive EV penetration in India, Moody's has said.

In a report, Moody's Investors Service said India has the fourth-largest car market globally, but electric vehicle (EV) penetration is currently only around 1%.

The pace of increase in EV sales and towards the government’s target of 30% by 2030 will also depend on the country's charging infrastructure, and consumers' readiness to switch to EVs from traditional ICE vehicles, or those traditional engines powered by petrol, diesel, or natural gas.

"We expect various government incentives will drive an increase in EV penetration. These include consumer incentives, production-linked incentives for advanced battery storage to drive local cell manufacturing, goods and services tax (GST) rate cuts, and other state-level subsidies," Moody's said.

India has beaten Japan to become the third-largest vehicle market in 2022 after China and the U.S.

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Last month, Union Minister Nitin Gadkari had said that if India can use the lithium reserves recently discovered in Jammu and Kashmir, it can become the world's number one automobile manufacturer in electric vehicle segment.