The domestic electric vehicles (EV) market is expected to touch one crore units in annual sales by 2030 and would create 5 crore direct and indirect jobs, according to the Economic Survey 2022-23.
The Survey tabled in the Parliament on Tuesday said that EV market was expected to grow at a compound annual growth rate (CAGR) of 49% between 2022 and 2030 and is likely to hit one crore units annual sales by 2030.
The Survey highlighted that the automotive industry was expected to play a critical role in the transition towards green energy, and further said the sector would create five crore direct and indirect jobs by 2030. .
Talking about the enhanced budget allocation under Faster Adoption and Manufacturing of EVs (FAME), the pre-Budget document said it was increased to ₹10,000 crore under phase-II (2019-24) from ₹895 crore in phase I (2014-19).
FAME-II sanctioned 2,877 charging stations in 68 cities and 1,576 charging stations across expressways/highways against 520 charging EV stations in FAME-I.
The scheme had envisaged support to one million 2-wheelers, 0.5 million 3-wheelers; 55,000 cars and 7,090 buses. It incentivised 7.1 lakh EVs, sanctioned 7,210 e-buses, of which 2,172 e-buses were deployed until December 2022.
The Survey noted that India became the third-largest automobile market in December 2022 by surpassing Japan and Germany in terms of sales.
In 2021, India was the largest manufacturer of two-wheeler and three-wheeler vehicles and the world’s fourth-largest manufacturer of passenger cars.
The sector’s importance was gauged by the fact that it contributed 7.1% to the overall GDP and 49% to the manufacturing GDP while generating direct and indirect employment of 3.7 crore at the end of 2021.
Despite the upbeat outlook, the automotive industry faces certain challenges such as higher borrowing costs and tempering global demand, as per the Survey.
An increase in long-term, third-party vehicle insurance premiums resulted in 10-11% increase in total upfront insurance cost, especially for two-wheelers, according to the Survey. Therefore, the two-wheeler segment is the most affected and witnessed the lowest sales in the last ten years. Addressing these challenges will boost the automobile industry, it said.
