Explained: Future of India’s Automobile Industry

Future of the Indian automobile industry: The Indian automobile industry has the potential to be number one in the world in the next five years through alternative fuel sources. Read the complete analysis here.
Created On: Oct 13, 2021 12:52 IST
Modified On: Oct 13, 2021 13:07 IST
Explained: Future of India’s Automobile Industry
Explained: Future of India’s Automobile Industry

Union Minister for Road Transport and Highways Nitin Gadkari in an event stated that the country’s automobile industry has the potential to be number one in the world in the next five years through alternative fuel sources. His vision is to make India a leading automobile hub. 

Speaking on the occasion, Union Minister Nitin Gadkari said, “I am confident that we are going to be the number one in the world by using alternative fuel and technology within five years.”

He went on to say, “ All reputed brands from around the world are in India, and it is my dream to make the automobile sector the number one in the world.”

The event discussed whether India was transitioning from fossil fuel-powered vehicles to electric vehicles as the country is facing pollution and economy-related issues. The country needs to be saved from the air, water and sound pollution. 

India’s Automobile Sector

India annually manufactures 26 million vehicles including passenger and commercial vehicles, two-wheelers and three-wheelers. In 2020, India exported around 4.7 million vehicles. 

Apart from this, India is the largest tractor manufacturer, second largest bus and two-wheeler manufacturer, third-largest heavy truck manufacturer, and fourth-largest car manufacturer in the world. By 2026, India is expected to be the third-largest automobile hub in the world. 

Push for Electric Vehicles

While speaking on the potential of electric vehicles in the country, Union Minister Nitin Gadkari stated that the sales of electric cars increased by 140% in 2021 globally compared to 2020. 

World leaders have spent around $125 billion on the purchase of electric vehicles across the world. The global charging stations have reached 1.3 million units and around $14 billion have been spent globally to support electric cars. This is because they have reduced the dependence on oil and have low carbon emissions, thus helping the world to realise climate goals. 

It is important to note that electric vehicles run with the help of electric motors. These vehicles are powered by rechargeable batteries and are less complicated as compared to others. 

Future of Electric Vehicles in India

By 2030, around 70% of commercial vehicles, 40% buses, 30% cars and 80% two-wheelers will be electric, according to Union Minister Nitin Gadkari. Several initiatives such as the National Electric Mobility Mission Plan (NEMMP) and Faster Adoption and Manufacturing of Hybrid and Electric vehicle (FAME) have been undertaken by the Government of India to realise the 2030 goal. 

Experts have expressed that by 2030 onwards, every vehicle that will be sold will be electric and interest from the people coming from tier one to tier four towns has grown manifold. Petrol hike and scrapping policy can turn things in favour of electric vehicles. 

State governments have also undertaken several measures to introduce e-vehicles in the heavy vehicle sector. Haryana and Punjab are planning to convert their fleet of fuel-powered state buses into electric ones. Haryana will convert 100% of its fuel-powered state buses into electric ones by 2022, Punjab will convert 25% of its fleet by 2022, Madhya Pradesh will convert its public transport into electric ones by 2026. Bihar has devised a plan to convert peddling rickshaws into electric ones by 2022

Why are people reluctant to switch to electric vehicles?

When it comes to electric vehicles in India, much awareness is needed to tap their potential. People have expressed their concern over infrastructures such as charging stations and the distance they can cover on a single charge. 

Union Minister Nitin Gadkari stated that once the vehicle is fully charged at home, it can cover a long distance. Also, charging stations would be made available to the public to help reduce anxiety. Fast charging is already available in the country and the vehicle can be charged the same way one charge his smartphone. 

Alternative fuel sources

Apart from electric vehicles, alternative fuel sources have also been introduced in India’s automobile sector that not only have a significant impact on the environment but also on the economy.

India is the fourth largest importer of crude oil in the world. It meets nearly 80% of its crude oil demands and 40% of the natural gas demands through imports. As India’s energy demands are increasing exponentially, it needs to switch to alternative energy sources to stop spending billions of dollars on oil and natural gas imports. Pollution and fluctuating petrol and diesel prices have forced India to look for alternative fuel sources. 

Switch to ethanol-blended petrol

In the prevailing situation, Ethanol has emerged as a promising alternative for India’s clean energy needs in the 21st century. The Government of India is planning to blend 20% Ethanol in petrol by the end of 2025, thereby assuring India’s energy security. The E20 initiative will be undertaken by the government in 2023 to realise this goal. At present, 5-10% of ethanol is blended with petrol in the country. 

The blending can save billions of dollars and will generate extra income for farmers in the country as Ethanol is produced majorly through sugarcane in India. India can also tap into the surplus storage of sugarcane, corn, etc. in the FCI godowns to produce Ethanol. In addition to the above, Ethanol emits fewer pollutants as compared to other fossil fuels. 

In the coming years, Ethanol based pumps will be installed in the country from where 100% pure ethanol could be accessed. 

The significant transition will help the country in reducing the cost as well as will bring down the levels of pollution in the country. Almost every country in the world is working to attain the net-zero goal by 2050 and India is also working towards the same. However, India has not yet made any commitment at the International level. 

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