Hoping to meet green energy targets and boost its core auto industry as well as cut air pollution in Indian cities, the Indian government on Wednesday announced a $3.5 billion fund for electric and hydrogen-fuelled vehicles. Push announced.
The plan, which includes incentives for automakers to invest in clean technology cars, will allow India to “leap forward” to environmentally clean vehicles, the cabinet said in a statement announcing the effort.
“This will usher in a new era in higher technology, more efficient and greener automotive manufacturing,” the statement said.
Clean fuel vehicles still make up a fraction of the country’s vehicles, despite ambitious targets announced four years ago for a 100% transition to electric cars by 2030.
However, the move could give India a head start in an industry that is emerging globally by providing incentives to manufacturers, according to auto analysts.
Avnish Chandra said, “The government is looking more serious and its focus is clearly on green energy. So the support it is giving is not for the entire auto industry, but only for those who are in this sector. Invest in technological advancement.” An auto analyst at Mumbai-based wealth equity firm SMIFS Ltd.
The move to electric vehicles will also contribute significantly to the country’s goal of cutting carbon emissions – India is the world’s third largest emitter of carbon.
Plus, its cities have some of the dirtiest air in the world – according to an analysis by Greenpeace, India is home to 22 of the 30 cities with the worst air pollution in the world.
Environmental experts have long said that the country’s vast transportation sector is a major contributor to dangerous air in the country, where a vastly inadequate public transport infrastructure has led to increased reliance on private vehicles – Delhi’s roads, for example, Over 12 million vehicles are loaded.
With its big push towards solar power, the latest initiative will help, according to Amit Kumar, a former senior director at The Energy and Resources Institute in New Delhi.
“Certainly this is the right direction to go. We have to focus on cutting vehicle emissions to meet our green energy goals whether with electric or hydrogen-powered vehicles,” he said.
Prime Minister Narendra Modi said earlier this year that India is on track to achieve its Paris Agreement goals of cutting carbon emissions before the 2030 target date.
However, auto analyst Chandra said he doesn’t expect a massive shift to electric vehicles for several years.
“Petrol and diesel cars are here to stay for at least 10 years, but the world is moving towards electric vehicles, so we should not be left behind. Support from the government will encourage companies to invest,” he said.
The government says it expects to generate about $5.8 billion in new investment and create 750,000 jobs in a region that contributes nearly $100 billion to the country’s GDP.
There have been reports that electric car pioneer Elon Musk’s Tesla Inc. is planning to enter India, while domestic manufacturers have also said they plan to make big investments to transition to electric cars.
India has emerged as one of the world’s leading automobile manufacturing hubs in recent decades, but the region has struggled in recent years as an economy that was already faltering before the pandemic demanded it.