Electrifying India’s mobility with government incentives and startup innovation

India is on the brink of an electric vehicle (EV) revolution, and it’s not just about sustainability—it’s about creating a new industry that will generate millions of jobs, attract foreign investment, and position India as a global leader in electric mobility. The government’s proactive policies and incentives have set the stage, but it’s the entrepreneurial spirit and innovation of startups that will propel this revolution forward.

Recently, the Government of India set an ambitious target of achieving 30% EV penetration by 2030. Its commitment to accelerating EV adoption is evident through schemes like EMPS 2024 and FAME II, which offer substantial subsidies for EVs and charging infrastructure. The reduced GST rates and the Phased Manufacturing Programme for localising EV component production have created a fertile ground for startups to innovate and thrive. EMPS 2024—initiated in April and slated to continue until the end of July—aims to extend support of up to Rs 10,000 per two-wheeler for around 3.33 lakh vehicles.

Ola Electric, the poster child of the Indian EV startup scene, has leveraged these government tailwinds to build a formidable presence in the electric two-wheeler market. With plans to set up the world’s largest electric two-wheeler manufacturing facility and a vertically integrated approach encompassing battery technology, charging infrastructure, and software solutions, Ola Electric has raised $200 million at a $3-billion valuation, showcasing the immense potential of the EV sector.

But the EV revolution isn’t just about vehicles; it’s about building a robust supply chain that supports the entire ecosystem. From advanced battery technologies and charging infrastructure to vehicle design and manufacturing, startups have a plethora of opportunities to innovate and create value. Companies such as Log 9 Materials, ION Energy, Exicom Power Solutions, and Magenta Power are already making significant strides in these areas.

Towards an electric future

The transition to an electric fleet is even more crucial for India than for other nations. With a rapidly growing population and increasing urbanisation, India’s cities are grappling with severe air pollution and congestion. EVs offer a cleaner, more efficient alternative that can help mitigate these challenges.

Additionally, India’s heavy reliance on oil imports makes the country vulnerable to global price fluctuations and supply disruptions. By embracing EVs, India can reduce its dependence on foreign oil and enhance its energy security.

Consumer mindset towards EVs is also shifting, driven by increasing awareness of the environmental benefits, lower operating costs, and improving range and performance of EVs. However, challenges such as high upfront costs and limited charging infrastructure still need to be addressed to accelerate widespread adoption.

Opportunities and challenges

The EV sector presents an unparalleled opportunity for entrepreneurs, investors, and policymakers to collaborate and shape the future of mobility. By supporting startups that are developing cutting-edge technologies, building scalable business models, and creating value for all stakeholders, we can accelerate the adoption of EVs in India and contribute to the country's sustainable development goals.

One challenge prevalent in the US is the heavy privatisation of charging infrastructure. Exclusive access to charging stations, reserved for specific manufacturers like Tesla, Ford, and Nissan, limits interoperability and hinders widespread adoption.

To ensure India's success in the EV realm, unfettered access to charging facilities is paramount. While integrating with existing infrastructure such as petrol stations marks a promising start, India may require a network of universally accessible charging stations to truly propel the EV revolution. This exemplifies the intricate dynamics at play within the EV ecosystem and underscores the imperative for collaborative efforts to overcome barriers and foster inclusive growth.

The road ahead is electrifying, and it’s time for India to embrace this revolution with open arms. By leveraging government incentives, tapping into the country’s vast talent pool, and fostering a spirit of innovation and entrepreneurship, we can power India’s transition to a cleaner, greener, and more sustainable future.

The EV revolution is not just about transforming mobility; it’s about creating a more resilient, self-reliant, and prosperous India.

The author is General Partner at Good Capital, a Delhi-based venture capital firm.