Electrifying the transportation sector in rural India

India’s commitment to sustainable goals and consequent push for green mobility have accelerated the adoption of electric vehicles across the country. Contrary to the common perception that EVs will largely remain confined to urban areas, demand from rural and semi-urban areas is witnessing a continuous rise. Electric two-wheelers are in high demand among the consumers in these regions. The penetration of electric four-wheelers has also begun, and it is expected that with more options of 4W consumers’ interest will increase.

?India is striving to achieve 100 percent EV adoption by 2030. To accomplish this target, it is important to push EV penetration in rural India which is the world’s largest market for the segment. This is the reason why the government is aggressively promoting EVs in the region and manufacturers are making modifications to the vehicles to make them fit for the area.

?Why the demand for green mobility is increasing in rural India

?The major reason behind consumers’ inclination toward e-vehicle is the continuous rise in fossil fuel prices. It is increasing the running cost of ICE vehicles and consumers are looking for alternatives. EVs have emerged as the most cost-effective solution to travelling needs.

?Simultaneously, the awareness regarding environmental protection has increased significantly in the last few years among the rural population. They want to contribute to the environmental safety efforts of the government. EVs don’t produce any chemicals detrimental to the environment and operate silently. These are among the prominent reasons behind the popularity of EVs in rural areas.

?At the same time, power subsidy being provided by different governments to rural populations also encourages EV adoption in the region. Additionally, many states have achieved 100 percent electrification that is making the adoption smooth.

?Moreover, rural India is also seeing the development of solar energy generation infrastructure at a fast pace. A lot of villages have the requisite infrastructure to generate solar energy the entire day and utilise it. Consumers can use the energy for charging their EVs.

?Also, the government is providing subsidies for the purchase of EVs. Besides, it has eased the documentation requirements for EVs which is playing a key role in stimulating consumer sentiment in the region. Under the FAME-II policy, the government has increased the subsidy rate for electric two-wheelers from Rs 10,000/kWh to 15,000/kWh to reduce the price gap between petrol and electric two-wheelers. Simultaneously, it increased the incentive capping from 20 per cent to 40 per cent of the cost of the vehicles. These steps are quite efficacious in encouraging consumers to purchase EVs.

?What are the major challenges

?Though the EV penetration is taking place in the rural belt, the pace is not at the desired level. The region is battling with various challenges such as inadequacy of infrastructure, lack of high-performing electric vehicles and high upfront costs.

?The region requires a robust charging infrastructure so that it can be accessed easily. At the same time, it is important to ensure proper care, maintenance and safety of charging stations. Private players can play a key role in developing charging infrastructure in the region. But they don’t see it financially viable. In such a scenario, the government can think about Public-Private-Partnership (PPP) mode.

?The other major challenge is the cost of vehicles. Li-ion batteries are used in EVs which increase the cost of vehicles. The government can provide subsidies wherever possible to reduce the financial burden on consumers.

?Way forward

?Rural India is the biggest automobile market. Its shift to EV is vital to achieve electrification and sustainability targets. The adoption is already happening and with some policy measures and steps, the pace can be boosted. The obstacles must be dealt with the right and timely actions and make the electrification of the automobile sector in rural India smooth.